If You Had Bought Ground International Development (HKG:989) Stock A Year Ago, You Could Pocket A 434% Gain Today

For many, the main point of investing in the stock market is to achieve spectacular returns. When you find (and hold) a big winner, you can markedly improve your finances. In the case of Ground International Development Limited (HKG:989), the share price is up an incredible 434% in the last year alone. On top of that, the share price is up 50% in about a quarter. Unfortunately the longer term returns are not so good, with the stock falling 78% in the last three years.

View our latest analysis for Ground International Development

Because Ground International Development 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Ground International Development actually shrunk its revenue over the last year, with a reduction of 49%. So it's very confusing to see that the share price gained a whopping 434%. There can be no doubt this kind of decoupling of revenue growth and share price growth is unusual to see in loss making companies. While this gain looks like speculative buying to us, sometimes speculation pays off.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

This free interactive report on Ground International Development's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

We're pleased to report that Ground International Development shareholders have received a total shareholder return of 434% over one year. There's no doubt those recent returns are much better than the TSR loss of 9% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Ground International Development better, we need to consider many other factors. For instance, we've identified 6 warning signs for Ground International Development (3 don't sit too well with us) that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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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