While some are satisfied with an index fund, active investors aim to find truly magnificent investments on the stock market. When you buy and hold the right company, the returns can make a huge difference to both you and your family. In the case of Victoria plc (LON:VCP), the share price is up an incredible 369% in the last year alone. It's also good to see the share price up 34% over the last quarter. The longer term returns have not been as good, with the stock price only 23% higher than it was three years ago.
Victoria 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.
In the last year Victoria saw its revenue grow by 1.4%. That's not great considering the company is losing money. So it's truly surprising that the share price rocketed 369% in a single year. We're happy that investors have made money, but we can't help questioning whether the rise is sustainable. This is an example of the huge profits some lucky shareholders occasionally make on growth stocks.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
This free interactive report on Victoria's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
We're pleased to report that Victoria shareholders have received a total shareholder return of 369% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 25% per year), it would seem that the stock's performance has improved in recent times. 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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Victoria (of which 1 can't be ignored!) you should know about.
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB 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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