Shareholders delighted Oracle (NYSE: ORCL) share price rose 101%
When buying shares in a company, you should keep in mind the possibility that it will fail and you could lose your money. But on the bright side, if you buy a high quality company stock at the right price, you can earn well over 100%. For example, the price of Oracle Corporation (NYSE: ORCL) has grown an impressive 101% over the past five years. It’s also good to see the stock price up 19% in the last quarter.
See our latest analysis for Oracle
While the markets are a powerful pricing mechanism, stock prices reflect investor sentiment, not just underlying business performance. By comparing earnings per share (EPS) and changes in stock prices over time, we can get an idea of how investor attitudes towards a company have evolved over time.
Over half a decade, Oracle has managed to increase its earnings per share by 16% per year. This EPS growth is remarkably close to the average 15% annual increase in the share price. This indicates that investor sentiment towards the company has not changed much. Indeed, it would appear that the stock price is reacting to BPA.
The company’s earnings per share (over time) is shown in the image below (click to see exact numbers).
It’s good to see that there have been some significant insider buys over the past three months. This is a positive point. That said, we believe earnings and revenue growth trends are even more important factors to consider. This free Oracle’s interactive Revenue, Revenue, and Cash Flow report is a great place to start if you want to dig deeper into your inventory research.
What about dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. TSR is a yield calculation that takes into account the value of cash dividends (assuming any dividends received have been reinvested) and the calculated value of any capital increase and discounted spin-off. Arguably, the TSR gives a more complete picture of the return generated by a stock. In fact, Oracle’s TSR for the past 5 years was 119%, which exceeds the share price return mentioned earlier. The dividends paid by the company thus boosted the total back to shareholders.
A different perspective
Oracle shareholders received a 49% year-over-year return (including dividends), which is not far from the overall market return. This gain seems quite satisfactory, and it is even better than the five-year TSR of 17% per year. It is possible that management foresight will bring growth in the future, even if the stock price slows. It is always interesting to follow the evolution of stock prices over the long term. But to understand Oracle better, there are many other factors that we need to consider. For example, we discovered 2 warning signs for Oracle (1 doesn’t suit us very well!) Which you should be aware of before investing here.
Oracle is not the only one to buy. So take a look at this free list of growing companies with insider buying.
Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently traded on US stock exchanges.
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This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take into account your goals or your financial situation. We aim to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative information. Simply Wall St has no position in any of the stocks mentioned.
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