Investors ignore increasing losses at Pak Tak International (HKG:2668) as stock jumps 25% this past week

Pak Tak International Limited (HKG:2668) shareholders might be rather concerned because the share price has dropped 48% in the last month. But that cannot eclipse the spectacular share price rise we've seen over the last twelve months. Indeed, the share price is up a whopping 919% in that time. So we wouldn't blame sellers for taking some profits. The real question is whether the fundamental business performance can justify the strong increase over the long term. Anyone who held for that rewarding ride would probably be keen to talk about it.

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

Check out our latest analysis for Pak Tak International

Because Pak Tak International made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally hope to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last year Pak Tak International saw its revenue grow by 66%. That's a head and shoulders above most loss-making companies. But the share price seems headed to the moon, up 919% as previously highlighted. Despite the strong growth, it's certainly possible the market has gotten a little over-excited. But if the share price does moderate a bit, there might be an opportunity for high growth investors.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. This free interactive report on Pak Tak International's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that Pak Tak International has rewarded shareholders with a total shareholder return of 919% in the last twelve months. 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. It's always interesting to track share price performance over the longer term. But to understand Pak Tak International better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Pak Tak International (including 2 which can't be ignored) .

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Hong Kong exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.