Introducing JOST Werke (ETR:JST), A Stock That Climbed 25% In The Last Year

The simplest way to invest in stocks is to buy exchange traded funds. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). To wit, the JOST Werke AG (ETR:JST) share price is 25% higher than it was a year ago, much better than the market return of around 2.0% (not including dividends) in the same period. So that should have shareholders smiling. However, the stock hasn't done so well in the longer term, with the stock only up 2.9% in three years.

See our latest analysis for JOST Werke

Given that JOST Werke only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

In the last year JOST Werke saw its revenue shrink by 5.9%. The stock is up 25% in that time, a fine performance given the revenue drop. We can correlate the share price rise with revenue or profit growth, but it seems the market had previously expected weaker results, and sentiment around the stock is improving.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

We know that JOST Werke has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at JOST Werke's financial health with this free report on its balance sheet.

A Different Perspective

Pleasingly, JOST Werke's total shareholder return last year was 25%. That's better than the annualized TSR of 2.7% over the last three years. These improved returns may hint at some real business momentum, implying that now could be a great time to delve deeper. 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 3 warning signs with JOST Werke , and understanding them should be part of your investment process.

We will like JOST Werke better if we see some big insider buys. While we wait, check out this free list of growing companies 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 DE 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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