If you want to compound wealth in the stock market, you can do so by buying an index fund. But investors can boost returns by picking market-beating companies to own shares in. To wit, the Yixin Group Limited (HKG:2858) share price is 11% higher than it was a year ago, much better than the market decline of around 0.8% (not including dividends) in the same period. So that should have shareholders smiling. Yixin Group hasn't been listed for long, so it's still not clear if it is a long term winner.
While Yixin Group made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.
Over the last twelve months, Yixin Group's revenue grew by 4.8%. That's not great considering the company is losing money. In keeping with the revenue growth, the share price gained 11% in that time. While not a huge gain tht seems pretty reasonable. Given the market doesn't seem too excited about the stock, a closer look at the financial data could pay off, if you can find indications of a stronger growth trend in the future.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
We know that Yixin Group has improved its bottom line over the last three years, but what does the future have in store? You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.
A Different Perspective
Yixin Group boasts a total shareholder return of 11% for the last year. A substantial portion of that gain has come in the last three months, with the stock up 55% in that time. This suggests the company is continuing to win over new investors. It's always interesting to track share price performance over the longer term. But to understand Yixin Group better, we need to consider many other factors. For instance, we've identified 3 warning signs for Yixin Group that you should be aware of.
We will like Yixin Group 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 HK 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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