Fuel Tech (NASDAQ:FTEK) delivers shareholders splendid 25% CAGR over 5 years, surging 13% in the last week alone

When you buy a stock there is always a possibility that it could drop 100%. But on the bright side, you can make far more than 100% on a really good stock. For example, the Fuel Tech, Inc. (NASDAQ:FTEK) share price has soared 207% in the last half decade. Most would be very happy with that. It's also good to see the share price up 192% over the last quarter.

Since it's been a strong week for Fuel Tech shareholders, let's have a look at trend of the longer term fundamentals.

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Fuel Tech wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last 5 years Fuel Tech saw its revenue grow at 4.0% per year. Put simply, that growth rate fails to impress. In comparison, the share price rise of 25% per year over the last half a decade is pretty impressive. Shareholders should be pretty happy with that, although interested investors might want to examine the financial data more closely to see if the gains are really justified. Some might suggest that the sentiment around the stock is rather positive.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. If you are thinking of buying or selling Fuel Tech stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

It's nice to see that Fuel Tech shareholders have received a total shareholder return of 174% over the last year. That's better than the annualised return of 25% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Fuel Tech better, we need to consider many other factors. For instance, we've identified 2 warning signs for Fuel Tech that you should be aware of.

Fuel Tech is not the only stock insiders are buying. So take a peek at this free list of small cap companies at attractive valuations which insiders have been buying.

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

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.