Update: MAV Beauty Brands (TSE:MAV) Stock Gained 32% In The Last Year

If you want to compound wealth in the stock market, you can do so by buying an index fund. But investors can boost returns by picking market-beating companies to own shares in. To wit, the MAV Beauty Brands Inc. (TSE:MAV) share price is 32% higher than it was a year ago, much better than the market return of around 0.7% (not including dividends) in the same period. So that should have shareholders smiling. MAV Beauty Brands hasn't been listed for long, so it's still not clear if it is a long term winner.

Check out our latest analysis for MAV Beauty Brands

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Over the last twelve months, MAV Beauty Brands actually shrank its EPS by 17%.

This means it's unlikely the market is judging the company based on earnings growth. Indeed, when EPS is declining but the share price is up, it often means the market is considering other factors.

We think that the revenue growth of 16% could have some investors interested. We do see some companies suppress earnings in order to accelerate revenue growth.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Take a more thorough look at MAV Beauty Brands' financial health with this free report on its balance sheet.

A Different Perspective

MAV Beauty Brands shareholders should be happy with the total gain of 32% over the last twelve months. A substantial portion of that gain has come in the last three months, with the stock up 50% in that time. This suggests the company is continuing to win over new investors. 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. For example, we've discovered 3 warning signs for MAV Beauty Brands (1 is potentially serious!) that you should be aware of before investing here.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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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