Did You Participate In Any Of Masterplast Nyrt's (BUSE:MASTERPLAST) Incredible 385% Return?

For many, the main point of investing in the stock market is to achieve spectacular returns. While the best companies are hard to find, but they can generate massive returns over long periods. Just think about the savvy investors who held Masterplast Nyrt. (BUSE:MASTERPLAST) shares for the last five years, while they gained 317%. This just goes to show the value creation that some businesses can achieve. Also pleasing for shareholders was the 172% gain in the last three months.

Check out our latest analysis for Masterplast Nyrt

Masterplast Nyrt recorded just €115,122,241 in revenue over the last twelve months, which isn't really enough for us to consider it to have a proven product. So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). Investors will be hoping that Masterplast Nyrt can make progress and gain better traction for the business, before it runs low on cash.

Companies that lack both meaningful revenue and profits are usually considered high risk. There is almost always a chance they will need to raise more capital, and their progress - and share price - will dictate how dilutive that is to current holders. While some such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt. Some Masterplast Nyrt investors have already had a taste of the sweet taste stocks like this can leave in the mouth, as they gain popularity and attract speculative capital.

Our data indicates that Masterplast Nyrt had €61m more in total liabilities than it had cash, when it last reported in September 2020. That makes it extremely high risk, in our view. So we're surprised to see the stock up 57% per year, over 5 years , but we're happy for holders. Investors must really like its potential. You can see in the image below, how Masterplast Nyrt's cash levels have changed over time (click to see the values).

In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. One thing you can do is check if company insiders are buying shares. It's often positive if so, assuming the buying is sustained and meaningful. Luckily we are in a position to provide you with this free chart of insider buying (and selling).

What about the Total Shareholder Return (TSR)?

We've already covered Masterplast Nyrt's share price action, but we should also mention its total shareholder return (TSR). The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Masterplast Nyrt's TSR of 385% for the 5 years exceeded its share price return, because it has paid dividends.

A Different Perspective

We're pleased to report that Masterplast Nyrt shareholders have received a total shareholder return of 161% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 37% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. Case in point: We've spotted 3 warning signs for Masterplast Nyrt you should be aware of, and 1 of them can't be ignored.

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 HU 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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