Is Asia Energy Logistics Group's (HKG:351) Share Price Gain Of 209% Well Earned?

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. For example, the Asia Energy Logistics Group Limited (HKG:351) share price had more than doubled in just one year - up 209%. Also pleasing for shareholders was the 73% gain in the last three months. Unfortunately the longer term returns are not so good, with the stock falling 27% in the last three years.

See our latest analysis for Asia Energy Logistics Group

Asia Energy Logistics Group 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. Shareholders of unprofitable companies usually expect strong revenue growth. 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 Asia Energy Logistics Group saw its revenue grow by 2.0%. That's not a very high growth rate considering it doesn't make profits. So we wouldn't have expected the share price to rise by 209%. We're happy that investors have made money, though we wonder if the increase will be sustained. We're not so sure that revenue growth is driving the market optimism about the stock.

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

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. This free interactive report on Asia Energy Logistics Group's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

We're pleased to report that Asia Energy Logistics Group shareholders have received a total shareholder return of 209% over one year. That certainly beats the loss of about 13% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. 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 example, we've discovered 4 warning signs for Asia Energy Logistics Group (2 are concerning!) that you should be aware of before investing here.

Asia Energy Logistics Group is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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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