Shareholders have faith in loss-making Shenzhen InfoGem Technologies (SZSE:300085) as stock climbs 30% in past week, taking one-year gain to 243%

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. For example, the Shenzhen InfoGem Technologies Co., Ltd. (SZSE:300085) share price had more than doubled in just one year - up 243%. It's even up 30% in the last week. Also impressive, the stock is up 155% over three years, making long term shareholders happy, too.

Since it's been a strong week for Shenzhen InfoGem Technologies shareholders, let's have a look at trend of the longer term fundamentals.

Check out our latest analysis for Shenzhen InfoGem Technologies

Shenzhen InfoGem Technologies wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually desire strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Shenzhen InfoGem Technologies actually shrunk its revenue over the last year, with a reduction of 18%. So we would not have expected the share price to rise 243%. It just goes to show the market doesn't always pay attention to the reported numbers. It's quite likely the revenue fall was already priced in, anyway.

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

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. It might be well worthwhile taking a look at our free report on Shenzhen InfoGem Technologies' earnings, revenue and cash flow.

A Different Perspective

It's good to see that Shenzhen InfoGem Technologies has rewarded shareholders with a total shareholder return of 243% in the last twelve months. That gain is better than the annual TSR over five years, which is 22%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Shenzhen InfoGem Technologies better, we need to consider many other factors. For example, we've discovered 2 warning signs for Shenzhen InfoGem Technologies that you should be aware of before investing here.

We will like Shenzhen InfoGem Technologies better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Chinese 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.