Metalfrio Solutions (BVMF:FRIO3) shareholder returns have been incredible, earning 550% in 3 years

Generally speaking, investors are inspired to be stock pickers by the potential to find the big winners. You won't get it right every time, but when you do, the returns can be truly splendid. One bright shining star stock has been Metalfrio Solutions S.A. (BVMF:FRIO3), which is 550% higher than three years ago. Also pleasing for shareholders was the 146% gain in the last three months. It really delights us to see such great share price performance for investors.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

View our latest analysis for Metalfrio Solutions

Given that Metalfrio Solutions only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. 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 3 years Metalfrio Solutions saw its revenue grow at 0.1% per year. Considering the company is losing money, we think that rate of revenue growth is uninspiring. Therefore, we're a little surprised to see the share price gain has been so strong, at 87% per year, compound, over three years. We'll tip our hats to that, any day, but the top-line growth isn't particularly impressive when you compare it to other pre-profit companies. The company will need to continue to execute on its business strategy to justify this rise.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

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

A Different Perspective

We're pleased to report that Metalfrio Solutions shareholders have received a total shareholder return of 10% over one year. Having said that, the five-year TSR of 40% a year, is even better. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Take risks, for example - Metalfrio Solutions has 4 warning signs (and 2 which are concerning) we think you should know about.

But note: Metalfrio Solutions may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.