Did You Miss mdf commerce's (TSE:MDF) Impressive 145% Share Price Gain?

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But if you pick the right business to buy shares in, you can make more than you can lose. Take, for example mdf commerce inc. (TSE:MDF). Its share price is already up an impressive 145% in the last twelve months. Also pleasing for shareholders was the 62% gain in the last three months. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report. Looking back further, the stock price is 30% higher than it was three years ago.

Check out our latest analysis for mdf commerce

mdf commerce isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

mdf commerce grew its revenue by 5.6% last year. That's not great considering the company is losing money. So we wouldn't have expected the share price to rise by 145%. We're happy that investors have made money, though we wonder if the increase will be sustained. It's quite likely that the market is considering other factors, not just revenue growth.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

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. If you are thinking of buying or selling mdf commerce stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

It's good to see that mdf commerce has rewarded shareholders with a total shareholder return of 145% in the last twelve months. That's better than the annualised return of 1.9% 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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with mdf commerce (at least 1 which is a bit concerning) , and understanding them should be part of your investment process.

mdf commerce is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider 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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