Yahoo Finance Eldorado Gold (TSE:ELD) shareholder returns have been massive, earning 321% in 5 years
Long term investing can be life changing when you buy and hold the truly great businesses. While not every stock performs well, when investors win, they can win big. Just think about the savvy investors who held Eldorado Gold Corporation (TSE:ELD) shares for the last five years, while they gained 321%. And this is just one example of the epic gains achieved by some long term investors. Also pleasing for shareholders was the 24% gain in the last three months. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report.
Since the stock has added CA$183m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.
View our latest analysis for Eldorado Gold
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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 five years of share price growth, Eldorado Gold moved from a loss to profitability. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. It might be well worthwhile taking a look at our free report on Eldorado Gold's earnings, revenue and cash flow.
A Different Perspective
It's nice to see that Eldorado Gold shareholders have received a total shareholder return of 28% over the last year. However, that falls short of the 33% TSR per annum it has made for shareholders, each year, over five years. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Eldorado Gold , and understanding them should be part of your investment process.
Eldorado Gold is not the only stock that insiders are buying. 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 Canadian 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.
