Optimism for AYM Syntex (NSE:AYMSYNTEX) has grown this past week, despite five-year decline in earnings

Buying shares in the best businesses can build meaningful wealth for you and your family. And we've seen some truly amazing gains over the years. To wit, the AYM Syntex Limited (NSE:AYMSYNTEX) share price has soared 368% over five years. If that doesn't get you thinking about long term investing, we don't know what will. Also pleasing for shareholders was the 47% gain in the last three months.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

Check out our latest analysis for AYM Syntex

We don't think that AYM Syntex's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

For the last half decade, AYM Syntex can boast revenue growth at a rate of 10% per year. That's a pretty good long term growth rate. Arguably it's more than reflected in the very strong share price gain of 36% a year over a half a decade. It might not be cheap but a (long-term) growth stock like this is usually well worth taking a closer look at.

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

Take a more thorough look at AYM Syntex's financial health with this free report on its balance sheet.

A Different Perspective

It's good to see that AYM Syntex has rewarded shareholders with a total shareholder return of 96% in the last twelve months. That gain is better than the annual TSR over five years, which is 36%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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. Take risks, for example - AYM Syntex has 5 warning signs (and 2 which are potentially serious) we think you should know about.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Indian 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com