Despite its recent challenges, CrowdStrike’s growth rate has been phenomenal for years.
For best investing results, you need to look forward, not backward. If you own a stock that has crashed, don’t focus on how much you’ve lost on it but instead on where you think it will go from here. If you don’t have much confidence in its prospects, sell no matter how much you’ve lost. If you’re still bullish, hang on. Still, it can be instructive — or just fun — to see how much you might have made hanging on to certain stocks for time.
So, how much would you have today if you’d invested in cybersecurity specialist CrowdStrike (CRWD -0.72%) five years ago? If you’d invested $10,000 in CrowdStrike on Sept. 24, 2019 and hung on to your shares until now, your stake would be worth about $43,100!
That’s good enough for a compound annual return of 33.8%, far better than how the S&P 500 performed over the same period with its otherwise solid annual return of 13.8%. That’s well above its long-term average annual return near 10%. A $10,000 investment in the S&P 500 five years ago would have turned into a stake worth about $19,100 today.
CrowdStrike managed to deliver such outstanding gains despite making big news this summer when it triggered a major global computer outage. Unfortunately, the company will lose some customers over the event, not to mention the damage to its reputation within the business world. If there’s a silver lining here, it’s the possibility any losses are smaller than expected, and CrowdStrike is still a good business with attractive cybersecurity offerings. Management has tried to assure investors and clients that it has taken steps to ensure such an incident won’t happen again.
If you’re intrigued, take the time to learn more about CrowdStrike and its business. If you like what you see, you may decide this recent dip — with the stock down 28% from its 52-week high — is a great buying opportunity.
Selena Maranjian has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends CrowdStrike. The Motley Fool has a disclosure policy.
