Genetic Signatures' (ASX:GSS) Wonderful 522% Share Price Increase Shows How Capitalism Can Build Wealth

Generally speaking, investors are inspired to be stock pickers by the potential to find the big winners. Not every pick can be a winner, but when you pick the right stock, you can win big. For example, the Genetic Signatures Limited (ASX:GSS) share price is up a whopping 522% in the last three years, a handsome return for long term holders. And in the last week the share price has popped 25%.

We love happy stories like this one. The company should be really proud of that performance!

View our latest analysis for Genetic Signatures

Given that Genetic Signatures didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Genetic Signatures' revenue trended up 37% each year over three years. That's well above most 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 84% 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 Genetic Signatures 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.

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

This free interactive report on Genetic Signatures' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that Genetic Signatures has rewarded shareholders with a total shareholder return of 103% in the last twelve months. That's better than the annualised return of 19% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. You could get a better understanding of Genetic Signatures' growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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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