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Can You Imagine How Elated Clinuvel Pharmaceuticals's (ASX:CUV) Shareholders Feel About Its 834% Share Price Gain?

Simply Wall St

It hasn't been the best quarter for Clinuvel Pharmaceuticals Limited (ASX:CUV) shareholders, since the share price has fallen 19% in that time. But that does not change the realty that the stock's performance has been terrific, over five years. Indeed, the share price is up a whopping 834% in that time. Arguably, the recent fall is to be expected after such a strong rise. Of course what matters most is whether the business can improve itself sustainably, thus justifying a higher price.

It really delights us to see such great share price performance for investors.

View our latest analysis for Clinuvel Pharmaceuticals

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the five years of share price growth, Clinuvel Pharmaceuticals moved from a loss to profitability. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

ASX:CUV Past and Future Earnings, October 7th 2019
ASX:CUV Past and Future Earnings, October 7th 2019

It is of course excellent to see how Clinuvel Pharmaceuticals has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling Clinuvel Pharmaceuticals stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We're pleased to report that Clinuvel Pharmaceuticals shareholders have received a total shareholder return of 25% over one year. Of course, that includes the dividend. However, the TSR over five years, coming in at 56% per year, is even more impressive. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. Is Clinuvel Pharmaceuticals cheap compared to other companies? These 3 valuation measures might help you decide.

We will like Clinuvel Pharmaceuticals better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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. Thank you for reading.