First Majestic Silver (TSE:AG) adds CA$392m to market cap in the past 7 days, though investors from three years ago are still down 48%

First Majestic Silver Corp. (TSE:AG) shareholders should be happy to see the share price up 20% in the last week. But that cannot eclipse the less-than-impressive returns over the last three years. After all, the share price is down 49% in the last three years, significantly under-performing the market.

On a more encouraging note the company has added CA$392m to its market cap in just the last 7 days, so let's see if we can determine what's driven the three-year loss for shareholders.

Check out our latest analysis for First Majestic Silver

Given that First Majestic Silver didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over the last three years, First Majestic Silver's revenue dropped 0.4% per year. That's not what investors generally want to see. The stock has disappointed holders over the last three years, falling 14%, annualized. And with no profits, and weak revenue, are you surprised? Of course, sentiment could become too negative, and the company may actually be making progress to profitability.

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

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. So it makes a lot of sense to check out what analysts think First Majestic Silver will earn in the future (free profit forecasts).

A Different Perspective

First Majestic Silver shareholders gained a total return of 4.0% during the year. But that return falls short of the market. But at least that's still a gain! Over five years the TSR has been a reduction of 7% per year, over five years. So this might be a sign the business has turned its fortunes around. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with First Majestic Silver (at least 1 which doesn't sit too well with us) , and understanding them should be part of your investment process.

First Majestic Silver is not the only stock that insiders are buying. For those who like to find lesser know companies 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.

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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.