If You Had Bought GCL New Energy Holdings (HKG:451) Shares A Year Ago You'd Have Earned 164% Returns

By
Simply Wall St
Published
June 30, 2021
SEHK:451
Source: Shutterstock

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 GCL New Energy Holdings Limited (HKG:451) share price has soared 164% in the last year. Most would be very happy with that, especially in just one year! In more good news, the share price has risen 12% in thirty days. Unfortunately the longer term returns are not so good, with the stock falling 3.3% in the last three years.

Check out our latest analysis for GCL New Energy Holdings

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Over the last twelve months GCL New Energy Holdings went from profitable to unprofitable. While this may prove temporary, we'd consider it a negative, so we would not have expected to see the share price up. It may be that the company has done well on other metrics.

GCL New Energy Holdings' revenue actually dropped 18% over last year. So using a snapshot of key business metrics doesn't give us a good picture of why the market is bidding up the stock.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

earnings-and-revenue-growth
SEHK:451 Earnings and Revenue Growth July 1st 2021

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

We're pleased to report that GCL New Energy Holdings shareholders have received a total shareholder return of 164% over one year. That certainly beats the loss of about 3% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand GCL New Energy Holdings better, we need to consider many other factors. Even so, be aware that GCL New Energy Holdings is showing 3 warning signs in our investment analysis , and 1 of those is significant...

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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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Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.