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The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But on the bright side, you can make far more than 100% on a really good stock. One great example is Vertex Pharmaceuticals Incorporated (NASDAQ:VRTX) which saw its share price drive 155% higher over five years. On the other hand, we note it's down 9.9% in about a month. We note that the broader market is down 0.4% in the last month, and this may have impacted Vertex Pharmaceuticals's share price.
While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.
During the last half decade, Vertex Pharmaceuticals 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).
It is of course excellent to see how Vertex Pharmaceuticals has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling Vertex Pharmaceuticals stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
We're pleased to report that Vertex Pharmaceuticals shareholders have received a total shareholder return of 15% over one year. However, the TSR over five years, coming in at 21% per year, is even more impressive. Before spending more time on Vertex Pharmaceuticals 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 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. Thank you for reading.