Notion VTec Berhad (KLSE:NOTION) spikes 16% this week, taking one-year gains to 37%

If you want to compound wealth in the stock market, you can do so by buying an index fund. But investors can boost returns by picking market-beating companies to own shares in. To wit, the Notion VTec Berhad (KLSE:NOTION) share price is 37% higher than it was a year ago, much better than the market return of around 10% (not including dividends) in the same period. That's a solid performance by our standards! In contrast, the longer term returns are negative, since the share price is 35% lower than it was three years ago.

Since the stock has added RM36m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

Check out our latest analysis for Notion VTec Berhad

Because Notion VTec 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over the last twelve months, Notion VTec Berhad's revenue grew by 9.2%. That's not a very high growth rate considering it doesn't make profits. In keeping with the revenue growth, the share price gained 37% in that time. That's not a standout result, but it is solid - much like the level of revenue growth. It could be worth keeping an eye on this one, especially if growth accelerates.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

This free interactive report on Notion VTec Berhad's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's nice to see that Notion VTec Berhad shareholders have received a total shareholder return of 37% over the last year. That's better than the annualised return of 7% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Notion VTec Berhad better, we need to consider many other factors. Take risks, for example - Notion VTec Berhad has 3 warning signs (and 2 which are concerning) we think you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will 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.

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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.