Golden Entertainment's (NASDAQ:GDEN) investors will be pleased with their fantastic 539% return over the last three years
We think that it's fair to say that the possibility of finding fantastic multi-year winners is what motivates many investors. But when you hold the right stock for the right time period, the rewards can be truly huge. For example, the Golden Entertainment, Inc. (NASDAQ:GDEN) share price is up a whopping 539% in the last three years, a handsome return for long term holders. Also pleasing for shareholders was the 13% gain in the last three months. It really delights us to see such great share price performance for investors.
Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.
View our latest analysis for Golden Entertainment
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
During three years of share price growth, Golden Entertainment moved from a loss to profitability. Given the importance of this milestone, it's not overly surprising that the share price has increased strongly.
The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).
We know that Golden Entertainment has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling Golden Entertainment stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
While the broader market lost about 7.6% in the twelve months, Golden Entertainment shareholders did even worse, losing 16%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn't be so upset, since they would have made 12%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Golden Entertainment better, we need to consider many other factors. Even so, be aware that Golden Entertainment is showing 2 warning signs in our investment analysis , and 1 of those is potentially serious...
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
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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