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The Sykes Enterprises (NASDAQ:SYKE) Share Price Has Gained 46% And Shareholders Are Hoping For More

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Simply Wall St
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If you want to compound wealth in the stock market, you can do so by buying an index fund. But the truth is, you can make significant gains if you buy good quality businesses at the right price. For example, the Sykes Enterprises, Incorporated (NASDAQ:SYKE) share price is up 46% in the last five years, slightly above the market return. Zooming in, the stock is up just 1.2% in the last year.

Check out our latest analysis for Sykes Enterprises

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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 five years of share price growth, Sykes Enterprises achieved compound earnings per share (EPS) growth of 4.5% per year. This EPS growth is slower than the share price growth of 7.8% per year, over the same period. This suggests that market participants hold the company in higher regard, these days. And that's hardly shocking given the track record of growth.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

NasdaqGS:SYKE Past and Future Earnings, September 11th 2019
NasdaqGS:SYKE Past and Future Earnings, September 11th 2019

We know that Sykes Enterprises has improved its bottom line lately, but is it going to grow revenue? If you're interested, you could check this free report showing consensus revenue forecasts.

A Different Perspective

Sykes Enterprises shareholders are up 1.2% for the year. But that return falls short of the market. If we look back over five years, the returns are even better, coming in at 7.8% per year for five years. It may well be that this is a business worth popping on the watching, given the continuing positive reception, over time, from the market. Before spending more time on Sykes Enterprises it might be wise to click here to see if insiders have been buying or selling shares.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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