Did You Miss Chengdu PUTIAN Telecommunications Cable's (HKG:1202) 39% Share Price Gain?

The simplest way to invest in stocks is to buy exchange traded funds. But investors can boost returns by picking market-beating companies to own shares in. To wit, the Chengdu PUTIAN Telecommunications Cable Company Limited (HKG:1202) share price is 39% higher than it was a year ago, much better than the market return of around 23% (not including dividends) in the same period. That's a solid performance by our standards! On the other hand, longer term shareholders have had a tougher run, with the stock falling 22% in three years.

Check out our latest analysis for Chengdu PUTIAN Telecommunications Cable

Chengdu PUTIAN Telecommunications Cable wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last year Chengdu PUTIAN Telecommunications Cable saw its revenue shrink by 26%. Despite the lack of revenue growth, the stock has returned a solid 39% the last twelve months. To us that means that there isn't a lot of correlation between the past revenue performance and the share price, but a closer look at analyst forecasts and the bottom line may well explain a lot.

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

It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of Chengdu PUTIAN Telecommunications Cable's earnings, revenue and cash flow.

A Different Perspective

It's nice to see that Chengdu PUTIAN Telecommunications Cable shareholders have received a total shareholder return of 39% over the last year. Notably the five-year annualised TSR loss of 4% 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. It's always interesting to track share price performance over the longer term. But to understand Chengdu PUTIAN Telecommunications Cable better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Chengdu PUTIAN Telecommunications Cable (at least 1 which is a bit unpleasant) , and understanding them should be part of your investment process.

Of course Chengdu PUTIAN Telecommunications Cable 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 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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