BCI Minerals (ASX:BCI) Has Gifted Shareholders With A Fantastic 158% Total Return On Their Investment

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on the bright side, you can make far more than 100% on a really good stock. One great example is BCI Minerals Limited (ASX:BCI) which saw its share price drive 118% higher over five years. On top of that, the share price is up 27% in about a quarter.

Check out our latest analysis for BCI Minerals

While BCI Minerals made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.

In the last 5 years BCI Minerals saw its revenue shrink by 29% per year. On the other hand, the share price done the opposite, gaining 17%, compound, each year. It's a good reminder that expectations about the future, not the past history, always impact share prices. Still, this situation makes us a little wary of the stock.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Take a more thorough look at BCI Minerals' financial health with this free report on its balance sheet.

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between BCI Minerals' total shareholder return (TSR) and its share price return. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. BCI Minerals' TSR of 158% for the 5 years exceeded its share price return, because it has paid dividends.

A Different Perspective

We're pleased to report that BCI Minerals shareholders have received a total shareholder return of 115% over one year. That's better than the annualised return of 21% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 4 warning signs for BCI Minerals you should be aware of, and 1 of them is potentially serious.

We will like BCI Minerals 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 AU 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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