Did High Tech Pharm's (KOSDAQ:106190) Share Price Deserve to Gain 91%?

These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). To wit, the High Tech Pharm Co., Ltd. (KOSDAQ:106190) share price is 91% higher than it was a year ago, much better than the market return of around 35% (not including dividends) in the same period. That's a solid performance by our standards! Looking back further, the stock price is 77% higher than it was three years ago.

Check out our latest analysis for High Tech Pharm

Because High Tech Pharm 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last year High Tech Pharm saw its revenue grow by 17%. That's a fairly respectable growth rate. While the share price performed well, gaining 91% over twelve months, you could argue the revenue growth warranted it. If revenue stays on trend, there may be plenty more share price gains to come. But before deciding this growth stock is underappreciated, you might want to check out profitability trends (and cash flow)

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

This free interactive report on High Tech Pharm's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's nice to see that High Tech Pharm shareholders have received a total shareholder return of 91% over the last year. That's better than the annualised return of 10% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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 instance, we've identified 2 warning signs for High Tech Pharm (1 can't be ignored) that you should be aware of.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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