In This Article:
We think all investors should try to buy and hold high quality multi-year winners. While the best companies are hard to find, but they can generate massive returns over long periods. Just think about the savvy investors who held United Therapeutics Corporation (NASDAQ:UTHR) shares for the last five years, while they gained 314%. And this is just one example of the epic gains achieved by some long term investors. In more good news, the share price has risen 8.1% in thirty days. But the price may well have benefitted from a buoyant market, since stocks have gained 3.9% in the last thirty days.
Since it's been a strong week for United Therapeutics shareholders, let's have a look at trend of the longer term fundamentals.
See our latest analysis for United Therapeutics
To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
During the last half decade, United Therapeutics 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. Given that the company made a profit three years ago, but not five years ago, it is worth looking at the share price returns over the last three years, too. We can see that the United Therapeutics share price is up 100% in the last three years. Meanwhile, EPS is up 34% per year. This EPS growth is higher than the 26% average annual increase in the share price over the same three years. Therefore, it seems the market has moderated its expectations for growth, somewhat.
The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).
We know that United Therapeutics has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling United Therapeutics stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
It's good to see that United Therapeutics has rewarded shareholders with a total shareholder return of 63% in the last twelve months. That gain is better than the annual TSR over five years, which is 33%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand United Therapeutics better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with United Therapeutics .