When you buy shares in a company, there is always a risk that the price drops to zero. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Mr. Bricolage SA (EPA:ALMRB) share price has soared 214% return in just a single year. On top of that, the share price is up 30% in about a quarter. But this could be related to the strong market, which is up 17% in the last three months. Unfortunately the longer term returns are not so good, with the stock falling 38% in the last three years.
Given that Mr. Bricolage 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.
Mr. Bricolage actually shrunk its revenue over the last year, with a reduction of 0.3%. So we would not have expected the share price to rise 214%. It just goes to show the market doesn't always pay attention to the reported numbers. Of course, it could be that the market expected this revenue drop.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
Take a more thorough look at Mr. Bricolage's financial health with this free report on its balance sheet.
A Different Perspective
We're pleased to report that Mr. Bricolage shareholders have received a total shareholder return of 214% over one year. That certainly beats the loss of about 4% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Mr. Bricolage , and understanding them should be part of your investment process.
We will like Mr. Bricolage 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 FR 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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