Investing in Ingersoll Rand (NYSE:IR) five years ago would have delivered you a 239% gain
The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on the bright side, you can make far more than 100% on a really good stock. For example, the Ingersoll Rand Inc. (NYSE:IR) share price has soared 238% in the last half decade. Most would be very happy with that. It's also good to see the share price up 27% over the last quarter. But this could be related to the strong market, which is up 12% in the last three months.
So let's assess the underlying fundamentals over the last 5 years and see if they've moved in lock-step with shareholder returns.
See our latest analysis for Ingersoll Rand
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. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
During the last half decade, Ingersoll Rand became profitable. 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).
We know that Ingersoll Rand has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on Ingersoll Rand's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
It's good to see that Ingersoll Rand has rewarded shareholders with a total shareholder return of 53% in the last twelve months. Of course, that includes the dividend. That's better than the annualised return of 28% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Ingersoll Rand better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Ingersoll Rand you should be aware of.
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.
