The simplest way to invest in stocks is to buy exchange traded funds. But if you pick the right individual stocks, you could make more than that. For example, the Alphatec Holdings, Inc. (NASDAQ:ATEC) share price is up 81% in the last year, clearly besting than the market return of around 0.9% (not including dividends). That’s a solid performance by our standards! Also impressive, the stock is up 69% over three years, making long term shareholders happy, too.
Because Alphatec Holdings is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last year Alphatec Holdings saw its revenue grow by 8.1%. That’s not great considering the company is losing money. In keeping with the revenue growth, the share price gained 81% in that time. While not a huge gain tht seems pretty reasonable. Given the market doesn’t seem too excited about the stock, a closer look at the financial data could pay off, if you can find indications of a stronger growth trend in the future.
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. This free report showing analyst forecasts should help you form a view on Alphatec Holdings
A Different Perspective
It’s nice to see that Alphatec Holdings shareholders have received a total shareholder return of 81% over the last year. There’s no doubt those recent returns are much better than the TSR loss of 22% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.
Alphatec Holdings 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.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.