The Appen Ltd (ASX: APX) share price has enjoyed strong returns since making its debut on the ASX.
The language technology data and services provider had a minuscule market capitalisation of $47.3 million when it listed on the ASX through an initial public offering (IPO) on 7 January 2015.
The IPO raised $15 million from various investors with an offer price of 50 cents per share.
At today’s valuation, Appen is now worth more than $829.14 million.
Below, we take a look at the power of long-term investing. I will calculate how much you would have made if you’d invested $10,000 in Appen shares 7 years ago.
What if you had invested $10,000 into Appen shares after they made their ASX debut?
If you had invested $10,000 in Appen shares on this day in 2015, you would have bought them for around 70 cents apiece. This gives you approximately 14,285 shares, without topping up along the way.
Fast-forward to today, the current Appen share price is at $6.72. This means that those 14,285 shares would be worth an astonishing $95,995.20.
In percentage terms, the initial investment implies a return of 860% or a yearly average return of 38.14%. For context, an ASX 200 index-tracking fund would have given back 24.8% since 2015 or a yearly average of 3.23%.
What about the dividends?
Over the course, Appen has made a total of 14 dividend payments from September 2015 to March 2022. It’s worth noting that the last few dividend distributions have been relatively steady despite its shares tanking in recent times.
Adding those 14 dividend payments gives us an amount of 52.2 cents per share. Calculating the number of shares owned against the total dividend payment gives us a figure of $7,456.77.
When putting both the initial investment gains and dividend distribution, an investor would have a total amount of $103,451.97.
Should you invest $10,000 in Appen shares right now?
A couple of brokers rated Appen shares with different price points following the company’s FY21 results in February.
The first was JPMorgan, which downgraded Appen shares to neutral from overweight.
In addition, its analysts also slashed the 12-month price target by 48% to $7 per share, which is in line with today’s price.
Following suit, the team at Citi also lowered its outlook by 38% to $9.15. It appears the broker believes that Appen shares are undervalued, representing an upside of 36%.
The post If you’d invested $10,000 in Appen shares 7 years ago, lucky you! Here’s what you’d have now appeared first on The Motley Fool Australia.
Should you invest $1,000 in Appen right now?
Before you consider Appen, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Appen wasn’t one of them.
The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of January 13th 2022
More reading
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- ASX 200 midday update: Brambles rockets, Goodman upgrades guidance
- Here’s why I think ASX-listed Appen could be a potential takeover target
- The Appen share price is charging 6% higher on Friday
Motley Fool contributor Aaron Teboneras has positions in Appen Ltd. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Appen Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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