If You Had Bought Kejuruteraanstera Berhad (KLSE:KAB) Stock A Year Ago, You Could Pocket A 274% Gain Today

By
Simply Wall St
Published
October 25, 2020
KLSE:KAB
Source: Shutterstock

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Kejuruteraan Asastera Berhad (KLSE:KAB) share price had more than doubled in just one year - up 274%. It's down 1.6% in the last seven days. Kejuruteraanstera Berhad hasn't been listed for long, so it's still not clear if it is a long term winner.

View our latest analysis for Kejuruteraanstera Berhad

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the last year, Kejuruteraanstera Berhad actually saw its earnings per share drop 5.7%.

Given the share price gain, we doubt the market is measuring progress with EPS. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

We doubt the modest 0.5% dividend yield is doing much to support the share price. However the year on year revenue growth of 15% would help. We do see some companies suppress earnings in order to accelerate revenue growth.

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

earnings-and-revenue-growth
KLSE:KAB Earnings and Revenue Growth October 26th 2020

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

A Different Perspective

Kejuruteraanstera Berhad shareholders should be happy with the total gain of 275% over the last twelve months, including dividends. We regret to report that the share price is down 3.7% over ninety days. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. 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. To that end, you should learn about the 3 warning signs we've spotted with Kejuruteraanstera Berhad (including 1 which is makes us a bit uncomfortable) .

But note: Kejuruteraanstera Berhad may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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

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