If You Had Bought Coastal Financial (NASDAQ:CCB) Stock A Year Ago, You Could Pocket A 71% Gain Today

Passive investing in index funds can generate returns that roughly match the overall market. But if you pick the right individual stocks, you could make more than that. To wit, the Coastal Financial Corporation (NASDAQ:CCB) share price is 71% higher than it was a year ago, much better than the market return of around 36% (not including dividends) in the same period. So that should have shareholders smiling. Coastal Financial hasn't been listed for long, so it's still not clear if it is a long term winner.

Check out our latest analysis for Coastal Financial

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Coastal Financial was able to grow EPS by 14% in the last twelve months. This EPS growth is significantly lower than the 71% increase in the share price. This indicates that the market is now more optimistic about the stock.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. It might be well worthwhile taking a look at our free report on Coastal Financial's earnings, revenue and cash flow.

A Different Perspective

It's nice to see that Coastal Financial shareholders have gained 71% over the last year. And the share price momentum remains respectable, with a gain of 42% in the last three months. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. It's always interesting to track share price performance over the longer term. But to understand Coastal Financial better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Coastal Financial you should know about.

Coastal Financial is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

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This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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