Alkermes (NASDAQ:ALKS) delivers shareholders favorable 26% CAGR over 3 years, surging 8.0% in the last week alone
By buying an index fund, investors can approximate the average market return. But if you buy good businesses at attractive prices, your portfolio returns could exceed the average market return. For example, Alkermes plc (NASDAQ:ALKS) shareholders have seen the share price rise 98% over three years, well in excess of the market return (58%, not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 5.7% in the last year.
Since it's been a strong week for Alkermes shareholders, let's have a look at trend of the longer term fundamentals.
Check out our latest analysis for Alkermes
Alkermes isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Alkermes actually saw its revenue drop by 0.3% per year over three years. Despite the lack of revenue growth, the stock has returned 26%, compound, over three years. If the company is cutting costs profitability could be on the horizon, but the revenue decline is a prima facie concern.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
We like that insiders have been buying shares in the last twelve months. 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 Alkermes will earn in the future (free profit forecasts).
A Different Perspective
It's nice to see that Alkermes shareholders have received a total shareholder return of 5.7% over the last year. That certainly beats the loss of about 6% per year over the last half decade. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares - and the price they paid.
Alkermes is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
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.
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