Yahoo Finance Recent 5.2% pullback isn't enough to hurt long-term MannKind (NASDAQ:MNKD) shareholders, they're still up 327% over 5 years
Long term investing can be life changing when you buy and hold the truly great businesses. While the best companies are hard to find, but they can generate massive returns over long periods. Don't believe it? Then look at the MannKind Corporation (NASDAQ:MNKD) share price. It's 327% higher than it was five years ago. This just goes to show the value creation that some businesses can achieve. On the other hand, the stock price has retraced 5.2% in the last week.
Although MannKind has shed US$71m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.
Check out our latest analysis for MannKind
While MannKind made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.
For the last half decade, MannKind can boast revenue growth at a rate of 30% per year. Even measured against other revenue-focussed companies, that's a good result. Arguably, this is well and truly reflected in the strong share price gain of 34%(per year) over the same period. Despite the strong run, top performers like MannKind have been known to go on winning for decades. So we'd recommend you take a closer look at this one, but keep in mind the market seems optimistic.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
It is of course excellent to see how MannKind has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at MannKind's financial health with this free report on its balance sheet.
A Different Perspective
MannKind provided a TSR of 18% over the last twelve months. Unfortunately this falls short of the market return. On the bright side, the longer term returns (running at about 34% a year, over half a decade) look better. It's quite possible the business continues to execute with prowess, even as the share price gains are slowing. 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. Take risks, for example - MannKind has 3 warning signs (and 2 which shouldn't be ignored) we think you should know about.
For those who like to find winning investments this free list of undervalued 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 American 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com
