Yahoo Finance DexCom (NASDAQ:DXCM) Shareholders Have Enjoyed A Whopping 608% Share Price Gain
Generally speaking, investors are inspired to be stock pickers by the potential to find the big winners. Mistakes are inevitable, but a single top stock pick can cover any losses, and so much more. For example, the DexCom, Inc. (NASDAQ:DXCM) share price is up a whopping 608% in the last three years, a handsome return for long term holders. It's also good to see the share price up 23% over the last quarter. But this move may well have been assisted by the reasonably buoyant market (up 12% in 90 days).
Anyone who held for that rewarding ride would probably be keen to talk about it.
Check out our latest analysis for DexCom
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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 three years of share price growth, DexCom 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).
It is of course excellent to see how DexCom has grown profits over the years, but the future is more important for shareholders. This free interactive report on DexCom's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
It's nice to see that DexCom shareholders have received a total shareholder return of 37% over the last year. However, the TSR over five years, coming in at 45% per year, is even more impressive. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For instance, we've identified 4 warning signs for DexCom (1 shouldn't be ignored) that you should be aware of.
We will like DexCom better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
This article by Simply Wall St is general in nature. 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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