Alphamin Resources (CVE:AFM) shareholders notch a 313% return over 1 year, yet earnings have been shrinking

By
Simply Wall St
Published
November 08, 2021
TSXV:AFM
Source: Shutterstock

While stock picking isn't easy, for those willing to persist and learn, it is possible to buy shares in great companies, and generate wonderful returns. When you find (and hold) a big winner, you can markedly improve your finances. For example, the Alphamin Resources Corp. (CVE:AFM) share price is up a whopping 313% in the last 1 year, a handsome return in a single year. It's also good to see the share price up 34% over the last quarter. It is also impressive that the stock is up 296% over three years, adding to the sense that it is a real winner.

The past week has proven to be lucrative for Alphamin Resources investors, so let's see if fundamentals drove the company's one-year performance.

Check out our latest analysis for Alphamin Resources

Given that Alphamin Resources only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.

In the last year Alphamin Resources saw its revenue grow by 82%. That's a head and shoulders above most loss-making companies. But the share price seems headed to the moon, up 313% as previously highlighted. Despite the strong growth, it's certainly possible the market has gotten a little over-excited. But if the share price does moderate a bit, there might be an opportunity for high growth investors.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth
TSXV:AFM Earnings and Revenue Growth November 9th 2021

We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. So we recommend checking out this free report showing consensus forecasts

A Different Perspective

We're pleased to report that Alphamin Resources shareholders have received a total shareholder return of 313% over one year. That's better than the annualised return of 28% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. Case in point: We've spotted 3 warning signs for Alphamin Resources you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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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