West African Resources (ASX:WAF) delivers shareholders stellar 28% CAGR over 5 years, surging 6.9% in the last week alone
West African Resources Limited (ASX:WAF) shareholders have seen the share price descend 12% over the month. But that scarcely detracts from the really solid long term returns generated by the company over five years. It's fair to say most would be happy with 249% the gain in that time. To some, the recent pullback wouldn't be surprising after such a fast rise. Only time will tell if there is still too much optimism currently reflected in the share price.
After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.
View our latest analysis for West African Resources
There is no denying that markets are sometimes efficient, but prices do not always reflect 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, West African Resources 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.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
We know that West African Resources has improved its bottom line lately, but is it going to grow revenue? Check if analysts think West African Resources will grow revenue in the future.
A Different Perspective
It's nice to see that West African Resources shareholders have received a total shareholder return of 23% over the last year. However, the TSR over five years, coming in at 28% per year, is even more impressive. It's always interesting to track share price performance over the longer term. But to understand West African Resources better, we need to consider many other factors. For instance, we've identified 1 warning sign for West African Resources that you should be aware of.
But note: West African Resources may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU 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.
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