Investors ignore increasing losses at Salutica Berhad (KLSE:SALUTE) as stock jumps 96% this past week
The most you can lose on any stock (assuming you don’t use leverage) is 100% of your money. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! For example, the Salutica Berhad (KLSE:SALUTE) share price has soared 176% in the last 1 year. Most would be very happy with that, especially in just one year! Better yet, the 327% gain over the last thirty days has shareholders excited. Also impressive, the stock is up 104% over three years, making long term shareholders happy, too.
The past week has proven to be lucrative for Salutica Berhad investors, so let’s see if fundamentals drove the company’s one-year performance.
Check out our latest analysis for Salutica Berhad
Because Salutica Berhad made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Salutica Berhad actually shrunk its revenue over the last year, with a reduction of 39%. So we would not have expected the share price to rise 176%. This is a good example of how buyers can push up prices even before the fundamental metrics show much growth. It’s quite likely the revenue fall was already priced in, anyway.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
It’s probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. It might be well worthwhile taking a look at our free report on Salutica Berhad’s earnings, revenue and cash flow.
A Different Perspective
We’re pleased to report that Salutica Berhad shareholders have received a total shareholder return of 176% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 15% per year), it would seem that the stock’s performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 2 warning signs we’ve spotted with Salutica Berhad .
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of companies that have proven they can grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Malaysian exchanges.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
