We think all investors should try to buy and hold high quality multi-year winners. While not every stock performs well, when investors win, they can win big. To wit, the CyberOptics Corporation (NASDAQ:CYBE) share price has soared 340% over five years. If that doesn't get you thinking about long term investing, we don't know what will. Also pleasing for shareholders was the 102% gain in the last three months.
We don't think that CyberOptics's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.
In the last 5 years CyberOptics saw its revenue grow at 6.1% per year. That's a fairly respectable growth rate. Arguably it's more than reflected in the very strong share price gain of 35% a year over a half a decade. It might not be cheap but a (long-term) growth stock like this is usually well worth taking a closer look at.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. So we recommend checking out this free report showing consensus forecasts
A Different Perspective
It's good to see that CyberOptics has rewarded shareholders with a total shareholder return of 216% in the last twelve months. That's better than the annualised return of 35% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand CyberOptics better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with CyberOptics , and understanding them should be part of your investment process.
Of course CyberOptics may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US 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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