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For many, the main point of investing in the stock market is to achieve spectacular returns. While the best companies are hard to find, but they can generate massive returns over long periods. To wit, the Westport Fuel Systems Inc. (TSE:WPRT) share price has soared 463% 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 322% in about a quarter.
Westport Fuel Systems 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. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
For the last half decade, Westport Fuel Systems can boast revenue growth at a rate of 18% per year. That's well above most pre-profit companies. Arguably, this is well and truly reflected in the strong share price gain of 41%(per year) over the same period. It's never too late to start following a top notch stock like Westport Fuel Systems, since some long term winners go on winning for decades. So we'd recommend you take a closer look at this one, but keep in mind the market seems optimistic.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. You can see what analysts are predicting for Westport Fuel Systems in this interactive graph of future profit estimates.
A Different Perspective
It's good to see that Westport Fuel Systems has rewarded shareholders with a total shareholder return of 344% in the last twelve months. That's better than the annualised return of 41% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Westport Fuel Systems better, we need to consider many other factors. Take risks, for example - Westport Fuel Systems has 2 warning signs we think you should be aware of.
Westport Fuel Systems 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 CA exchanges.
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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