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“I buy on the assumption that they could close the market the next day and not reopen it for five years.”

— Warren Buffett

The Warren Buffett investment philosophy calls for a long-term investment horizon, where a five year holding period, or even longer, would fit right into the strategy. How would such a strategy have worked out for an investment into Alexion Pharmaceuticals Inc. (NASD: ALXN)? Today, we examine the outcome of a five year investment into the stock back in 2014.

Start date: 04/24/2014
$10,000

04/24/2014
$8,486

04/23/2019
End date: 04/23/2019
Start price/share: $156.01
End price/share: $132.37
Starting shares: 64.10
Ending shares: 64.10
Dividends reinvested/share: $0.00
Total return: -15.15%
Average annual return: -3.23%
Starting investment: $10,000.00
Ending investment: $8,486.01

As we can see, the five year investment result worked out poorly, with an annualized rate of return of -3.23%. This would have turned a $10K investment made 5 years ago into $8,486.01 today (as of 04/23/2019). On a total return basis, that’s a result of -15.15% (something to think about: how might ALXN shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Another great investment quote to think about:
“Behind every stock is a company. Find out what it’s doing.” — Peter Lynch