Active investing isn't easy, but for those that do it, the aim is to find the best companies to buy, and to profit handsomely. When you buy and hold the right company, the returns can make a huge difference to both you and your family. For example, the UGE International Ltd. (CVE:UGE) share price rocketed moonwards 733% in just one year. In more good news, the share price has risen 10% in thirty days. And shareholders have also done well over the long term, with an increase of 145% in the last three years.
Anyone who held for that rewarding ride would probably be keen to talk about it.
UGE International isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last year UGE International saw its revenue shrink by 56%. This is in stark contrast to the splendorous stock price, which has rocketed 733% since this time a year ago. It's pretty clear the market isn't basing its valuation on fundamental metrics like revenue. While this gain looks like speculative buying to us, sometimes speculation pays off.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. If you are thinking of buying or selling UGE International stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
It's good to see that UGE International has rewarded shareholders with a total shareholder return of 733% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 5% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. To that end, you should learn about the 5 warning signs we've spotted with UGE International (including 1 which shouldn't be ignored) .
UGE International 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 CA 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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