The 4.6% return this week takes Cohu's (NASDAQ:COHU) shareholders five-year gains to 41%

If you buy and hold a stock for many years, you'd hope to be making a profit. But more than that, you probably want to see it rise more than the market average. But Cohu, Inc. (NASDAQ:COHU) has fallen short of that second goal, with a share price rise of 41% over five years, which is below the market return. Zooming in, the stock is actually down 15% in the last year.

The past week has proven to be lucrative for Cohu investors, so let's see if fundamentals drove the company's five-year performance.

View our latest analysis for Cohu

Cohu 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. Shareholders of unprofitable companies usually desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over the last half decade Cohu's revenue has actually been trending down at about 0.6% per year. The stock is only up 7% for each year during the period. Arguably that's not bad given the soft revenue and loss-making position. Of course, a closer look at the bottom line - and any available analyst forecasts - could reveal an opportunity (if they point to future growth).

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Take a more thorough look at Cohu's financial health with this free report on its balance sheet.

A Different Perspective

Cohu shareholders are down 15% for the year, but the market itself is up 34%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 7% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. Before spending more time on Cohu it might be wise to click here to see if insiders have been buying or selling shares.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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.