Stock Analysis

Did You Miss Trinity Exploration & Production's (LON:TRIN) Impressive 138% Share Price Gain?

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AIM:TRIN
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When you buy a stock there is always a possibility that it could drop 100%. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. For instance, the price of Trinity Exploration & Production plc (LON:TRIN) stock is up an impressive 138% over the last five years. Meanwhile the share price is 7.7% higher than it was a week ago.

View our latest analysis for Trinity Exploration & Production

Trinity Exploration & Production isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

For the last half decade, Trinity Exploration & Production can boast revenue growth at a rate of 4.9% per year. That's not a very high growth rate considering the bottom line. So we wouldn't have expected to see the share price to have lifted 19% for each year during that time, but that's what happened. Shareholders should be pretty happy with that, although interested investors might want to examine the financial data more closely to see if the gains are really justified. It may be that the market is pretty optimistic about Trinity Exploration & Production.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth
AIM:TRIN Earnings and Revenue Growth December 24th 2020

Take a more thorough look at Trinity Exploration & Production's financial health with this free report on its balance sheet.

A Different Perspective

Although it hurts that Trinity Exploration & Production returned a loss of 4.4% in the last twelve months, the broader market was actually worse, returning a loss of 7.5%. Of course, the long term returns are far more important and the good news is that over five years, the stock has returned 19% for each year. It could be that the business is just facing some short term problems, but shareholders should keep a close eye on the fundamentals. 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 risks, for instance. Every company has them, and we've spotted 1 warning sign for Trinity Exploration & Production you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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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