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Investing can be hard but the potential fo an individual stock to pay off big time inspires us. Mistakes are inevitable, but a single top stock pick can cover any losses, and so much more. Take, for example, the Phoslock Environmental Technologies Limited (ASX:PET) share price, which skyrocketed 900% over three years. It’s also up 13% in about a month.
We love happy stories like this one. The company should be really proud of that performance!
Given that Phoslock Environmental Technologies only made minimal earnings in the last twelve months, we’ll focus on revenue to gauge its business development. Many high growth companies focus on growing revenue before profits, but if revenue is the focus, it really needs to grow. That’s because it’s hard for shareholders to have confidence a company will grow profits significantly if it isn’t growing revenue.
Over the last three years Phoslock Environmental Technologies has grown its revenue at 92% annually. That’s well above most other pre-profit companies. In light of this attractive revenue growth, it seems somewhat appropriate that the share price has been rocketing, boasting a gain of 115% per year, over the same period. It’s always tempting to take profits after a share price gain like that, but high-growth companies like Phoslock Environmental Technologies can sometimes sustain strong growth for many years. So we’d recommend you take a closer look at this one, or even put it on your watchlist.
The graphic below shows how revenue and earnings have changed as management guided the business forward. If you want to see cashflow, you can click on the chart.
Take a more thorough look at Phoslock Environmental Technologies’s financial health with this free report on its balance sheet.
A Different Perspective
It’s nice to see that Phoslock Environmental Technologies shareholders have received a total shareholder return of 38% over the last year. Having said that, the five-year TSR of 53% a year, is even better. You could get a better understanding of Phoslock Environmental Technologies’s growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of companies that have proven they can grow earnings.Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU 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 email@example.com. 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.