Cantaloupe (NASDAQ:CTLP) advances 9.6% this week, taking five-year gains to 38%

The main point of investing for the long term is to make money. Furthermore, you'd generally like to see the share price rise faster than the market. But Cantaloupe, Inc. (NASDAQ:CTLP) has fallen short of that second goal, with a share price rise of 38% over five years, which is below the market return. However, more recent buyers should be happy with the increase of 37% over the last year.

Since the stock has added US$61m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

View our latest analysis for Cantaloupe

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the last half decade, Cantaloupe became profitable. That's generally thought to be a genuine positive, so investors may expect to see an increasing share price.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. This free interactive report on Cantaloupe's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

Cantaloupe's TSR for the year was broadly in line with the market average, at 37%. That gain looks pretty satisfying, and it is even better than the five-year TSR of 7% per year. Even if the share price growth slows down from here, there's a good chance that this is business worth watching in the long term. It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.

Cantaloupe is not the only stock that insiders are buying. For those who like to find lesser know companies this free list of growing 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.