Update: Pearl Global Industries (NSE:PGIL) Stock Gained 39% In The Last Three Years

By buying an index fund, you can roughly match the market return with ease. But if you pick the right individual stocks, you could make more than that. Just take a look at Pearl Global Industries Limited (NSE:PGIL), which is up 39%, over three years, soundly beating the market return of 4.4% (not including dividends). On the other hand, the returns haven't been quite so good recently, with shareholders up just 25%.

See our latest analysis for Pearl Global Industries

Because Pearl Global Industries made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. 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.

In the last 3 years Pearl Global Industries saw its revenue grow at 0.09% per year. That's not a very high growth rate considering it doesn't make profits. In that time the share price is up 12% per year, which is not unreasonable given the revenue gorwth. Ultimately, the important thing is whether the company is trending to profitability. Given the market doesn't seem too excited about the stock, a closer look at the financial data could pay off, if you can find indications of a stronger growth trend in the future.

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

This free interactive report on Pearl Global Industries' balance sheet strength is a great place to start, if you want to investigate the stock further.

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Pearl Global Industries' total shareholder return (TSR) and its share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Its history of dividend payouts mean that Pearl Global Industries' TSR of 44% over the last 3 years is better than the share price return.

A Different Perspective

We're pleased to report that Pearl Global Industries shareholders have received a total shareholder return of 25% over one year. That certainly beats the loss of about 2% per year over the last half decade. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. It's always interesting to track share price performance over the longer term. But to understand Pearl Global Industries better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Pearl Global Industries (of which 2 are significant!) you should know about.

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 IN 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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