The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But if you buy shares in a really great company, you can more than double your money. For example, the Avid Bioservices, Inc. (NASDAQ:CDMO) share price has soared 252% in the last three years. Most would be happy with that. It's also good to see the share price up 37% over the last quarter. This could be related to the recent financial results, released recently - you can catch up on the most recent data by reading our company report.
Avid Bioservices 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last 3 years Avid Bioservices saw its revenue shrink by 6.4% per year. So the share price gain of 52% per year is quite surprising. It's a good reminder that expectations about the future, not the past history, always impact share prices.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
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. This free report showing analyst forecasts should help you form a view on Avid Bioservices
A Different Perspective
It's nice to see that Avid Bioservices shareholders have received a total shareholder return of 79% over the last year. Notably the five-year annualised TSR loss of 6.7% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of Avid Bioservices by clicking this link.
Avid Bioservices 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 US exchanges.
If you spot an error that warrants correction, please contact the editor at email@example.com. 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. Simply Wall St has no position in the stocks mentioned.
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