Investors Who Bought RCM Technologies (NASDAQ:RCMT) Shares A Year Ago Are Now Up 117%

Unfortunately, investing is risky - companies can and do go bankrupt. But if you pick the right stock, you can make a lot more than 100%. For example, the RCM Technologies, Inc. (NASDAQ:RCMT) share price had more than doubled in just one year - up 117%. Shareholders are also celebrating an even better 321% rise, over the last three months. In contrast, the longer term returns are negative, since the share price is 5.3% lower than it was three years ago.

View our latest analysis for RCM Technologies

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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Over the last twelve months RCM Technologies went from profitable to unprofitable. While some may see this as temporary, we're a skeptical bunch, and so we're a little surprised to see the share price go up. It may be that the company has done well on other metrics.

Unfortunately RCM Technologies' fell 20% over twelve months. So using a snapshot of key business metrics doesn't give us a good picture of why the market is bidding up the stock.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. So it makes a lot of sense to check out what analysts think RCM Technologies will earn in the future (free profit forecasts).

A Different Perspective

It's nice to see that RCM Technologies shareholders have received a total shareholder return of 117% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 5% per year), it would seem that the stock's performance has improved in recent times. 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 RCM Technologies better, we need to consider many other factors. For example, we've discovered 3 warning signs for RCM Technologies that you should be aware of before investing here.

RCM Technologies 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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