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 ArQule, Inc. (NASDAQ:ARQL) share price has soared 623% over five years. This just goes to show the value creation that some businesses can achieve. It's even up 19% in the last week.
We love happy stories like this one. The company should be really proud of that performance!
Because ArQule is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last 5 years ArQule saw its revenue grow at 9.7% per year. That's a pretty good long term growth rate. Arguably it's more than reflected in the very strong share price gain of 49% a year over a half a decade. We usually like strong growth stocks but it does seem the market already appreciates this one quite well!
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Take a more thorough look at ArQule's financial health with this free report on its balance sheet.
A Different Perspective
It's good to see that ArQule has rewarded shareholders with a total shareholder return of 163% in the last twelve months. That's better than the annualised return of 49% 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. You could get a better understanding of ArQule's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
We will like ArQule 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 US exchanges.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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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