GeneOne Life Science (KRX:011000) Has Rewarded Shareholders With An Exceptional 855% Total Return On Their Investment

The last three months have been tough on GeneOne Life Science, Inc. (KRX:011000) shareholders, who have seen the share price decline a rather worrying 33%. But over the last year the share price has taken off like one of Elon Musk's rockets. In fact, it is up 772% in that time. So the recent fall isn't enough to negate the good performance. The real question is whether the fundamental business performance can justify the strong increase over the long term.

Anyone who held for that rewarding ride would probably be keen to talk about it.

Check out our latest analysis for GeneOne Life Science

GeneOne Life Science isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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 GeneOne Life Science saw its revenue grow by 8.6%. That's not a very high growth rate considering it doesn't make profits. So it's truly surprising that the share price rocketed 772% in a single year. It's great to see that some have made big profits, but we aren't so sure that the increase is justified. This is an example of the huge profits some lucky shareholders occasionally make on growth stocks.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between GeneOne Life Science's total shareholder return (TSR) and its share price change, which we've covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. We note that GeneOne Life Science's TSR, at 855% is higher than its share price return of 772%. When you consider it hasn't been paying a dividend, this data suggests shareholders have benefitted from a spin-off, or had the opportunity to acquire attractively priced shares in a discounted capital raising.

A Different Perspective

It's good to see that GeneOne Life Science has rewarded shareholders with a total shareholder return of 855% in the last twelve months. That gain is better than the annual TSR over five years, which is 21%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand GeneOne Life Science better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for GeneOne Life Science you should be aware of, and 2 of them can't be ignored.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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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