Returns to Ocado Group (LON:OCDO) shareholders have been fantastic, gaining 554% in 5 years

Ocado Group plc (LON:OCDO) Shareholders may be worried after seeing the stock price drop 13% in the last quarter. But that doesn’t change the fact that returns over the past half-decade have been spectacular. During this period, the stock price rose by 554%! So we don’t think the recent share price decline means its story is a sad one. Of course, what matters most is whether the company can sustainably improve, thus justifying a higher price. While the long-term returns are impressive, we have some sympathy for those who bought more recently, given last year’s 44% drop. We love happy stories like this. The company should be really proud of this performance!

After a strong gain last week, it’s worth seeing if longer-term returns have been driven by improving fundamentals.

See our latest analysis for Ocado Group

Since the Ocado Group has not made a profit in the last twelve months, we will focus on revenue growth to get a quick overview of its business development. Shareholders of unprofitable companies generally expect strong revenue growth. As you can imagine, rapid revenue growth, when sustained, often results in rapid profit growth.

Over the past 5 years, the Ocado group has seen its turnover grow by 14% per year. That’s a pretty good long-term growth rate. However, the stock price gain of 46% over the period is considerably higher. We generally like high-growth stocks, but it looks like the market is already liking this one pretty well!

You can see how earnings and income have changed over time below (find out the exact values ​​by clicking on the image).

LSE: OCDO Earnings and Revenue Growth January 28, 2022

We consider it positive that insiders have made significant purchases over the past year. Even so, future earnings will be far more important to whether current shareholders are making money. So it makes a lot of sense to check what analysts think the Ocado Group will earn in the future (free earnings forecasts).

A different perspective

Investors in the Ocado group had a difficult year, with a total loss of 44%, against a market gain of around 15%. Even good stock prices sometimes drop, but we want to see improvements in a company’s fundamentals before we get too interested. Longer-term investors wouldn’t be so upset, as they would have gained 46%, every year, over five years. If fundamentals continue to point to sustainable long-term growth, the current sell-off could be an opportunity to consider. While it is worth considering the various impacts that market conditions can have on the stock price, there are other, even more important factors. For example, we found 1 warning sign for Ocado Group which you should be aware of before investing here.

Ocado Group isn’t the only stock insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider buying, might be just the ticket.

Please note that the market returns quoted in this article reflect the market-weighted average returns of the shares currently trading on UK stock exchanges.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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