Investors in Al Khaleej Investment P.J.S.C (ADX:KICO) have seen fantastic returns of 448% over the past five years

Al Khaleej Investment P.J.S.C. (ADX:KICO) shareholders might be concerned after seeing the share price drop 13% in the last month. But that doesn't undermine the fantastic longer term performance (measured over five years). Indeed, the share price is up a whopping 448% in that time. Arguably, the recent fall is to be expected after such a strong rise. Of course what matters most is whether the business can improve itself sustainably, thus justifying a higher price.

So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.

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Given that Al Khaleej Investment P.J.S.C only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.

Over the last half decade Al Khaleej Investment P.J.S.C's revenue has actually been trending down at about 4.0% per year. This is in stark contrast to the strong share price growth of 41%, compound, per year. There can be no doubt this kind of decoupling of revenue growth and share price growth is unusual to see in loss making companies. I think it's fair to say there is probably a fair bit of excitement in the price.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

We're pleased to report that Al Khaleej Investment P.J.S.C shareholders have received a total shareholder return of 33% over one year. However, that falls short of the 41% TSR per annum it has made for shareholders, each year, over five years. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - Al Khaleej Investment P.J.S.C has 4 warning signs (and 1 which is concerning) we think you should know about.

But note: Al Khaleej Investment P.J.S.C may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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