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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 above quote from Warren Buffett is timeless, and brings into focus the choice about time horizon that any investor should think about before buying a stock they are considering. Behind every stock is an actual business; what will that business look like over a five year period?

Today, let’s look backwards in time to 2015, and take a look at what happened to investors who asked that very question about Ulta Beauty Inc (NASD: ULTA), by taking a look at the investment outcome over a five year holding period.

Start date: 05/08/2015


End date: 05/07/2020
Start price/share: $154.29
End price/share: $222.16
Starting shares: 64.81
Ending shares: 64.81
Dividends reinvested/share: $0.00
Total return: 43.99%
Average annual return: 7.56%
Starting investment: $10,000.00
Ending investment: $14,399.28

The above analysis shows the five year investment result worked out well, with an annualized rate of return of 7.56%. This would have turned a $10K investment made 5 years ago into $14,399.28 today (as of 05/07/2020). On a total return basis, that’s a result of 43.99% (something to think about: how might ULTA shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

Here’s one more great investment quote before you go:
“All the opportunity in the world means nothing if you don’t actually pull the trigger.” — Sam Zell