Investors ignore increasing losses at Super Strong Holdings (HKG:8262) as stock jumps 20% this past week

While some are satisfied with an index fund, active investors aim to find truly magnificent investments on the stock market. While not every stock performs well, when investors win, they can win big. In the case of Super Strong Holdings Limited (HKG:8262), the share price is up an incredible 532% in the last year alone. Better yet, the share price has gained 692% in the last quarter. Also impressive, the stock is up 137% over three years, making long term shareholders happy, too. It really delights us to see such great share price performance for investors.

The past week has proven to be lucrative for Super Strong Holdings investors, so let's see if fundamentals drove the company's one-year performance.

View our latest analysis for Super Strong Holdings

Super Strong Holdings 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Super Strong Holdings actually shrunk its revenue over the last year, with a reduction of 13%. So it's very confusing to see that the share price gained a whopping 532%. It's pretty clear the market isn't basing its valuation on fundamental metrics like revenue. While this gain looks like speculative buying to us, sometimes speculation pays off.

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

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

We're pleased to report that Super Strong Holdings shareholders have received a total shareholder return of 532% over one year. That gain is better than the annual TSR over five years, which is 26%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. Even so, be aware that Super Strong Holdings is showing 3 warning signs in our investment analysis , and 2 of those make us uncomfortable...

We will like Super Strong Holdings 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 Hong Kong 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.