Introducing Aleafia Health (TSE:AH), A Stock That Climbed 29% In The Last Year

Passive investing in index funds can generate returns that roughly match the overall market. But you can significantly boost your returns by picking above-average stocks. To wit, the Aleafia Health Inc. (TSE:AH) share price is 29% higher than it was a year ago, much better than the market return of around 1.5% (not including dividends) in the same period. If it can keep that out-performance up over the long term, investors will do very well! We'll need to follow Aleafia Health for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

See our latest analysis for Aleafia Health

Aleafia Health 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last year Aleafia Health saw its revenue grow by 221%. That's a head and shoulders above most loss-making companies. While the share price gain of 29% over twelve months is pretty tasty, you might argue it doesn't fully reflect the strong revenue growth. So quite frankly it could be a good time to investigate Aleafia Health in some detail. Since we evolved from monkeys, we think in linear terms by nature. So if growth goes exponential, opportunity may exist for the enlightened.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

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. This free report showing analyst forecasts should help you form a view on Aleafia Health

A Different Perspective

It's nice to see that Aleafia Health shareholders have gained 29% over the last year. And the share price momentum remains respectable, with a gain of 63% in the last three months. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. 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. To that end, you should be aware of the 2 warning signs we've spotted with Aleafia Health .

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are 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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