Despite shrinking by CA$110m in the past week, Shawcor (TSE:MATR) shareholders are still up 484% over 3 years

It might be of some concern to shareholders to see the Shawcor Ltd. (TSE:MATR) share price down 10% in the last month. But that doesn't displace its brilliant performance over three years. Over that time, we've been excited to watch the share price climb an impressive 484%. So you might argue that the recent reduction in the share price is unremarkable in light of the longer term performance. The only way to form a view of whether the current price is justified is to consider the merits of the business itself.

While the stock has fallen 8.1% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

View our latest analysis for Shawcor

Shawcor isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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.

Over the last three years Shawcor has grown its revenue at 3.4% annually. 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 80% per year, compound, over three years. A win is a win, even if the revenue growth doesn't really explain it, in our view). The company will need to continue to execute on its business strategy to justify this rise.

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. Even so, future earnings will be far more important to whether current shareholders make money. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

It's nice to see that Shawcor shareholders have received a total shareholder return of 191% over the last year. There's no doubt those recent returns are much better than the TSR loss of 5% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of Shawcor by clicking this link.

Shawcor is not the only stock that insiders are buying. 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 Canadian exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.