Did You Miss Sudatel Telecom Group's (ADX:SUDATEL) 28% Share Price Gain?

If you want to compound wealth in the stock market, you can do so by buying an index fund. But you can significantly boost your returns by picking above-average stocks. For example, the Sudatel Telecom Group Limited (ADX:SUDATEL) share price is up 28% in the last year, clearly besting the market return of around 22% (not including dividends). If it can keep that out-performance up over the long term, investors will do very well! In contrast, the longer term returns are negative, since the share price is 20% lower than it was three years ago.

View our latest analysis for Sudatel Telecom Group

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the last year, Sudatel Telecom Group actually saw its earnings per share drop 54%.

This means it's unlikely the market is judging the company based on earnings growth. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

We think that the revenue growth of 14% could have some investors interested. Many businesses do go through a phase where they have to forgo some profits to drive business development, and sometimes its for the best.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

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

A Different Perspective

Sudatel Telecom Group's TSR for the year was broadly in line with the market average, at 28%. The silver lining is that the share price is up in the short term, which flies in the face of the annualised loss of 0.7% over the last five years. While 'turnarounds seldom turn' there are green shoots for Sudatel Telecom Group. It's always interesting to track share price performance over the longer term. But to understand Sudatel Telecom Group better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Sudatel Telecom Group you should be aware of, and 2 of them are significant.

We will like Sudatel Telecom Group better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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