The 24% return this week takes KOZO HoldingsLtd's (TSE:9973) shareholders three-year gains to 63%

Thanks in no small measure to Vanguard founder Jack Bogle, it's easy buy a low cost index fund, which should provide the average market return. But if you pick the right individual stocks, you could make more than that. To wit, KOZO Holdings Co.,Ltd. (TSE:9973) shares are up 63% in three years, besting the market return. It's also good to see a healthy gain of 63% in the last year.

Since it's been a strong week for KOZO HoldingsLtd shareholders, let's have a look at trend of the longer term fundamentals.

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KOZO HoldingsLtd isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally hope to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

KOZO HoldingsLtd's revenue trended up 26% each year over three years. That's well above most pre-profit companies. While the compound gain of 18% 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 KOZO HoldingsLtd on your radar. If the company is trending towards profitability then it could be very interesting.

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

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

A Different Perspective

It's nice to see that KOZO HoldingsLtd shareholders have received a total shareholder return of 63% over the last year. Notably the five-year annualised TSR loss of 7% per year compares very unfavourably with the recent share price performance. 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. 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. Even so, be aware that KOZO HoldingsLtd is showing 3 warning signs in our investment analysis , and 2 of those don't sit too well with us...

We will like KOZO HoldingsLtd better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

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