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Passive investing in index funds can generate returns that roughly match the overall market. But you can significantly boost your returns by picking above-average stocks. To wit, the Angel Seafood Holdings Limited (ASX:AS1) share price is 13% higher than it was a year ago, much better than the market return of around 5.8% (not including dividends) in the same period. That’s a solid performance by our standards! Angel Seafood Holdings hasn’t been listed for long, so it’s still not clear if it is a long term winner.
Angel Seafood Holdings isn’t a profitable company, so it is unlikely we’ll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn’t make profits, we’d generally expect to see good 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.
Over the last twelve months, Angel Seafood Holdings’s revenue grew by 47%. That’s well above most other pre-profit companies. While the share price gain of 13% over twelve months is pretty tasty, you might argue it doesn’t fully reflect the strong revenue growth. So quite frankly it could be a good time to investigate Angel Seafood Holdings in some detail. Human beings have trouble conceptualizing (and valuing) exponential growth. Is that what we’re seeing here?
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. This free report showing analyst forecasts should help you form a view on Angel Seafood Holdings
A Different Perspective
With a TSR of 13% over the last year, Angel Seafood Holdings shareholders would be reasonably content, given that’s not far from the broader market return of 12%. A substantial portion of that gain has come in the last three months, with the stock up 2.9% in that time. This suggests the share price maintains some momentum, and investors are taking a more positive view of the stock. It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.
Angel Seafood Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
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.