SP SystemsLtd (KOSDAQ:317830) delivers shareholders respectable 8.2% CAGR over 5 years, surging 41% in the last week alone

When we invest, we're generally looking for stocks that outperform the market average. And while active stock picking involves risks (and requires diversification) it can also provide excess returns. For example, long term SP Systems Co.,Ltd. (KOSDAQ:317830) shareholders have enjoyed a 49% share price rise over the last half decade, well in excess of the market return of around 32% (not including dividends). On the other hand, the more recent gains haven't been so impressive, with shareholders gaining just 34%.

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.

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Given that SP SystemsLtd 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. When a company doesn't make profits, we'd generally hope to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

For the last half decade, SP SystemsLtd can boast revenue growth at a rate of 19% per year. That's well above most pre-profit companies. It's good to see that the stock has 8%, but not entirely surprising given revenue shows strong growth. If the strong revenue growth continues, we'd hope to see the share price to follow, in time. Opportunity lies where the market hasn't fully priced growth in the underlying business.

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

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

We're pleased to report that SP SystemsLtd shareholders have received a total shareholder return of 34% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 8% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand SP SystemsLtd better, we need to consider many other factors. For example, we've discovered 3 warning signs for SP SystemsLtd (1 shouldn't be ignored!) that you should be aware of before investing here.

Of course SP SystemsLtd 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 South Korean 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.