Doral Group Renewable Energy Resources (TLV:DORL) rallies 7.2% this week, taking three-year gains to 99%

By buying an index fund, you can roughly match the market return with ease. But if you choose individual stocks with prowess, you can make superior returns. For example, the Doral Group Renewable Energy Resources Ltd (TLV:DORL) share price is up 99% in the last three years, clearly besting the market return of around 54% (not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 56% in the last year.

Since the stock has added ₪258m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

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Given that Doral Group Renewable Energy Resources didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. 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.

Over the last three years Doral Group Renewable Energy Resources has grown its revenue at 77% annually. That's much better than most loss-making companies. While the compound gain of 26% per year over three years is pretty good, you might argue it doesn't fully reflect the strong revenue growth. So now might be the perfect time to put Doral Group Renewable Energy Resources on your radar. A window of opportunity may reveal itself with time, if the business can trend to profitability.

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

This free interactive report on Doral Group Renewable Energy Resources' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Doral Group Renewable Energy Resources shareholders have received returns of 56% over twelve months, which isn't far from the general market return. Most would be happy with a gain, and it helps that the year's return is actually better than the average return over five years, which was 9%. Even if the share price growth slows down from here, there's a good chance that this is business worth watching in the long term. 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 3 warning signs for Doral Group Renewable Energy Resources (2 make us uncomfortable!) that you should be aware of before investing here.

Of course Doral Group Renewable Energy Resources 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 Israeli exchanges.

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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.