RCM Technologies' (NASDAQ:RCMT) investors will be pleased with their incredible 977% return over the last three years
Generally speaking, investors are inspired to be stock pickers by the potential to find the big winners. But when you hold the right stock for the right time period, the rewards can be truly huge. For example, the RCM Technologies, Inc. (NASDAQ:RCMT) share price is up a whopping 977% in the last three years, a handsome return for long term holders. It's also good to see the share price up 45% over the last quarter. Anyone who held for that rewarding ride would probably be keen to talk about it.
So let's assess the underlying fundamentals over the last 3 years and see if they've moved in lock-step with shareholder returns.
See our latest analysis for RCM Technologies
There is no denying that markets are sometimes efficient, but prices do not always reflect 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 three years of share price growth, RCM Technologies moved from a loss to profitability. Given the importance of this milestone, it's not overly surprising that the share price has increased strongly.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
It is of course excellent to see how RCM Technologies has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling RCM Technologies stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
It's good to see that RCM Technologies has rewarded shareholders with a total shareholder return of 119% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 47% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Take risks, for example - RCM Technologies has 1 warning sign we think you should be aware of.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
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.
