Despite shrinking by HK$463m in the past week, Comba Telecom Systems Holdings (HKG:2342) shareholders are still up 113% over 1 year

Explore Comba Telecom Systems Holdings's Fair Values from the Community and select yours

Unfortunately, investing is risky - companies can and do go bankrupt. But if you pick the right business to buy shares in, you can make more than you can lose. Take, for example Comba Telecom Systems Holdings Limited (HKG:2342). Its share price is already up an impressive 113% in the last twelve months. Also pleasing for shareholders was the 20% gain in the last three months. But this could be related to the strong market, which is up 15% in the last three months. However, the stock hasn't done so well in the longer term, with the stock only up 25% in three years.

Since the long term performance has been good but there's been a recent pullback of 7.9%, let's check if the fundamentals match the share price.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Comba Telecom Systems Holdings isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually desire strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

In the last year Comba Telecom Systems Holdings saw its revenue shrink by 24%. We're a little surprised to see the share price pop 113% in the last year. This is a good example of how buyers can push up prices even before the fundamental metrics show much growth. Of course, it could be that the market expected this revenue drop.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

Take a more thorough look at Comba Telecom Systems Holdings' financial health with this free report on its balance sheet.

A Different Perspective

It's good to see that Comba Telecom Systems Holdings has rewarded shareholders with a total shareholder return of 113% in the last twelve months. That certainly beats the loss of about 8% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Comba Telecom Systems Holdings is showing 1 warning sign in our investment analysis , you should know about...

But note: Comba Telecom Systems Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.