Shareholders have faith in loss-making Sino Oil and Gas Holdings (HKG:702) as stock climbs 12% in past week, taking three-year gain to 112%

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But if you buy shares in a really great company, you can more than double your money. For example, the Sino Oil and Gas Holdings Limited (HKG:702) share price has soared 112% in the last three years. That sort of return is as solid as granite. On top of that, the share price is up 25% in about a quarter.

The past week has proven to be lucrative for Sino Oil and Gas Holdings investors, so let's see if fundamentals drove the company's three-year performance.

See our latest analysis for Sino Oil and Gas Holdings

Given that Sino Oil and Gas Holdings didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over the last three years Sino Oil and Gas Holdings has grown its revenue at 7.9% annually. That's not a very high growth rate considering it doesn't make profits. In contrast, the stock has popped 28% per year in that time - an impressive result. We'd need to take a closer look at the revenue and profit trends to see whether the improvements might justify that sort of increase. It may be that the market is pretty optimistic about Sino Oil and Gas Holdings if you look to the bottom line.

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

If you are thinking of buying or selling Sino Oil and Gas Holdings stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's nice to see that Sino Oil and Gas Holdings shareholders have received a total shareholder return of 12% over the last year. Notably the five-year annualised TSR loss of 8% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. 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. For instance, we've identified 3 warning signs for Sino Oil and Gas Holdings (1 doesn't sit too well with us) that you should be aware of.

Of course Sino Oil and Gas Holdings may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.