Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Long term investing can be life changing when you buy and hold the truly great businesses. And highest quality companies can see their share prices grow by huge amounts. To wit, the ArQule, Inc. (NASDAQ:ARQL) share price has soared 678% over five years. And this is just one example of the epic gains achieved by some long term investors. On top of that, the share price is up 87% in about a quarter.
Anyone who held for that rewarding ride would probably be keen to talk about it.
ArQule isn’t a profitable company, so 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. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
For the last half decade, ArQule can boast revenue growth at a rate of 12% per year. That’s a fairly respectable growth rate. Arguably it’s more than reflected in the very strong share price gain of 51% a year over a half a decade. We usually like strong growth stocks but it does seem the market already appreciates this one quite well!
We’re pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It’s always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. You can see what analysts are predicting for ArQule in this interactive graph of future profit estimates.
A Different Perspective
It’s good to see that ArQule has rewarded shareholders with a total shareholder return of 98% in the last twelve months. That gain is better than the annual TSR over five years, which is 51%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
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.