Is SunOpta's (TSE:SOY) Share Price Gain Of 194% Well Earned?

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But if you pick the right stock, you can make a lot more than 100%. Take, for example SunOpta Inc. (TSE:SOY). Its share price is already up an impressive 194% in the last twelve months. It's also good to see the share price up 43% over the last quarter. This could be related to the recent financial results, released recently - you can catch up on the most recent data by reading our company report. In contrast, the longer term returns are negative, since the share price is 15% lower than it was three years ago.

Check out our latest analysis for SunOpta

Given that SunOpta 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. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last year SunOpta saw its revenue grow by 0.9%. That's not great considering the company is losing money. In contrast, the share price took off during the year, gaining 194%. We're happy that investors have made money, though we wonder if the increase will be sustained. It's quite likely that the market is considering other factors, not just revenue growth.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. So it makes a lot of sense to check out what analysts think SunOpta will earn in the future (free profit forecasts).

A Different Perspective

We're pleased to report that SunOpta shareholders have received a total shareholder return of 194% over one year. There's no doubt those recent returns are much better than the TSR loss of 3.4% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand SunOpta better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for SunOpta you should be aware of.

SunOpta is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.

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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. 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.
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