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Investing in Axcelis Technologies (NASDAQ:ACLS) five years ago would have delivered you a 360% gain

1
Simply Wall St
·2 min read

We think all investors should try to buy and hold high quality multi-year winners. While the best companies are hard to find, but they can generate massive returns over long periods. To wit, the Axcelis Technologies, Inc. (NASDAQ:ACLS) share price has soared 360% 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 84% in about a quarter.

Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.

Check out our latest analysis for Axcelis Technologies

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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 five years of share price growth, Axcelis Technologies achieved compound earnings per share (EPS) growth of 31% per year. This EPS growth is reasonably close to the 36% average annual increase in the share price. Therefore one could conclude that sentiment towards the shares hasn't morphed very much. In fact, the share price seems to largely reflect the EPS growth.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

earnings-per-share-growth
earnings-per-share-growth

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

A Different Perspective

We're pleased to report that Axcelis Technologies shareholders have received a total shareholder return of 73% over one year. That's better than the annualised return of 36% 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 Axcelis Technologies better, we need to consider many other factors. Take risks, for example - Axcelis Technologies has 1 warning sign we think you should be aware of.

But note: Axcelis Technologies may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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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