CSL pulls back from all-time high

Global blood plasma and biopharmaceutical company CSL  (ASX: CSL) has seen its shares pull back slightly today in an otherwise positive market after touching a new record high of $68.79 yesterday. Amazingly, just 10 years ago investors could have picked the shares up for a split-adjusted price of $5.50. A decade later the stock price has increased nearly 1120%.

While buying 10 years ago would obviously have led to a superb return, so would have purchasing the stock just 12 months ago. In the last year CSL’s share price has rallied 54%, far outperforming the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) which is up 20%. The stock’s performance is not surprising given the full year results CSL reported in August. The company managed to grow sales by 10% on a constant currency basis and to boost earnings per share by 26% on a constant currency basis.

When an investor looks back over a long-term holding period, the benefits of buying a compounding machine like CSL become obvious. Looking to the future, an added benefit of an investment in CSL is the significant growth and earnings potential the company enjoys thanks to its increasing exposure to both foreign countries and to foreign currencies which are strengthening against the Australian dollar.

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Motley Fool contributor Tim McArthur does not own shares in any of the companies mentioned in this article.

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