At their pandemic lows, shares in Lloyds Banking Group (LSE:LLOY) were trading at 23.58p. With the stock now at 96.5p, that looks like an obvious once-in-a-lifetime opportunity.

That’s easy to say with hindsight, but what about now? Has the easy money been made, or are investors who think the time to buy has passed making it a big mistake?

Buy low?

Assuming the stock doesn’t go to zero, there’s no way around the fact that investors who bought the stock at 23.5p will do better than ones who buy it today. But it’s not as simple as that.

The fact a stock is up 300% doesn’t mean it can’t go higher. And this is something that anyone who’s been following Rolls-Royce (LSE:RR) shares over the last five years knows very well.

Shares in the FTSE 100 engine manufacturer climbed over 200% in 2023. But anyone who thought this meant the time to buy had passed missed another 215% gain.

The two companies though, are fundamentally different. And that means investors need to be careful before forming expectations about one based on facts about the other.

Share buybacks

One obvious point is that Lloyds is a highly cyclical company. A big reason the stock’s up is the fact that the firm’s earnings have been boosted by higher interest rates.

Investors should obviously be wary about the risk of things going the other way. But it’s also important to note that the business has also improved in some ways that should be permanent.

One is that the firm’s reduced its share count from around 71bn in 2021 to just over 59bn in 2026. So the amount each share accounts for is around 17% higher.

That’s a permanent change. Unless something causes the bank to issue equity in a future downturn, the value of each share should be higher than it was in 2021.

Cyclicality

It’s also worth noting that Rolls-Royce is another cyclical operation. A big part of its recent success has been the increase in flying hours, which is the result of travel demand. That’s remained strong since the end of the pandemic and continues to drive the firm forward.

It’s not the only reason the company’s earnings have been growing, but it’s an important one.

There’s a risk this might turn around in a recession, but – like Lloyds – Rolls-Royce has reduced its share count significantly. And this is set to continue, according to its latest report.

The point is that even cyclical businesses can grow over time. So the fact that Lloyds is likely to find things tougher if interest rates fall shouldn’t cause investors to write it off right now.

Still a buy?

Lloyds’ shares aren’t as cheap as they once were, but I think it’s a mistake to conclude that the time to buy the stock has passed on this basis alone. The business is still in a strong position.

In my view, an investment at today’s prices could still generate reasonable long-term returns. But the question is whether investors can find even better opportunities in today’s market.

I think they can. But one lesson to take from Rolls-Royce shares in recent years is that a cyclical business that goes up doesn’t automatically have to come straight back down.