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 buy and hold the right company, the returns can make a huge difference to both you and your family. For example, the POSaBIT Systems Corporation (CSE:PBIT) share price rocketed moonwards 793% in just one year. In more good news, the share price has risen 13% in thirty days. This could be related to the recent financial results that were recently released - you could check the most recent data by reading our company report. POSaBIT Systems hasn't been listed for long, so it's still not clear if it is a long term winner.
Anyone who held for that rewarding ride would probably be keen to talk about it.
Given that POSaBIT Systems 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 expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
POSaBIT Systems grew its revenue by 234% last year. That's a head and shoulders above most loss-making companies. But the share price has really rocketed in response gaining 793% as previously mentioned. Despite the strong growth, it's certainly possible the market has gotten a little over-excited. So this looks like a great watchlist candidate for investors who look for high growth inflexion points.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..
A Different Perspective
It's nice to see that POSaBIT Systems shareholders have gained 793% over the last year. A substantial portion of that gain has come in the last three months, with the stock up 205% 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 POSaBIT Systems (1 makes us a bit uncomfortable!) that you should be aware of before investing here.
POSaBIT Systems 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.
If you're looking for stocks to buy, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted
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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.