“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 ABIOMED, Inc. (NASD: ABMD)? Today, we examine the outcome of a five year investment into the stock back in 2016.
| Start date: | 05/18/2016 |
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| End date: | 05/17/2021 | ||||
| Start price/share: | $95.06 | ||||
| End price/share: | $267.95 | ||||
| Starting shares: | 105.20 | ||||
| Ending shares: | 105.20 | ||||
| Dividends reinvested/share: | $0.00 | ||||
| Total return: | 181.87% | ||||
| Average annual return: | 23.03% | ||||
| Starting investment: | $10,000.00 | ||||
| Ending investment: | $28,187.41 | ||||
The above analysis shows the five year investment result worked out exceptionally well, with an annualized rate of return of 23.03%. This would have turned a $10K investment made 5 years ago into $28,187.41 today (as of 05/17/2021). On a total return basis, that’s a result of 181.87% (something to think about: how might ABMD shares perform over the next 5 years?). [These numbers were computed with the Dividend Channel DRIP Returns Calculator.]
One more investment quote to leave you with:
“Price is what you pay. Value is what you get.” — Warren Buffett
