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If you want to compound wealth in the stock market, you can do so by buying an index fund. But if you pick the right individual stocks, you could make more than that. For example, the GCI Liberty, Inc. (NASDAQ:GLIB.A) share price is up 33% in the last year, clearly besting than the market return of around 6.1% (not including dividends). That’s a solid performance by our standards! Note that businesses generally develop over the long term, so the returns over the last year might not reflect a long term trend.
Given that GCI Liberty didn’t make a profit in the last twelve months, we’ll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Over the last twelve months, GCI Liberty’s revenue grew by 1006%. That’s a head and shoulders above most loss-making companies. The solid 33% share price gain goes down pretty well, but it’s not necessarily as good as you might expect given the top notch revenue growth. So quite frankly it could be a good time to investigate GCI Liberty in some detail. Human beings have trouble conceptualizing (and valuing) exponential growth. Is that what we’re seeing here?
Take a more thorough look at GCI Liberty’s financial health with this free report on its balance sheet.
A Different Perspective
GCI Liberty boasts a total shareholder return of 33% for the last year. A substantial portion of that gain has come in the last three months, with the stock up 9.6% in that time. This suggests the company is continuing to win over new investors. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.
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 US exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.