Malaysia Steel Works (KL) Bhd (KLSE:MASTEEL) Shareholders Have Enjoyed An Impressive 192% Share Price Gain

When you buy a stock there is always a possibility that it could drop 100%. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. One great example is Malaysia Steel Works (KL) Bhd. (KLSE:MASTEEL) which saw its share price drive 192% higher over five years. On top of that, the share price is up 144% in about a quarter.

View our latest analysis for Malaysia Steel Works (KL) Bhd

Because Malaysia Steel Works (KL) Bhd 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. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last 5 years Malaysia Steel Works (KL) Bhd saw its revenue grow at 2.3% per year. Put simply, that growth rate fails to impress. So we wouldn't have expected to see the share price to have lifted 24% for each year during that time, but that's what happened. Shareholders should be pretty happy with that, although interested investors might want to examine the financial data more closely to see if the gains are really justified. Some might suggest that the sentiment around the stock is rather positive.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

This free interactive report on Malaysia Steel Works (KL) Bhd's balance sheet strength is a great place to start, if you want to investigate the stock further.

What about the Total Shareholder Return (TSR)?

We've already covered Malaysia Steel Works (KL) Bhd's share price action, but we should also mention its total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Its history of dividend payouts mean that Malaysia Steel Works (KL) Bhd's TSR of 195% over the last 5 years is better than the share price return.

A Different Perspective

It's good to see that Malaysia Steel Works (KL) Bhd has rewarded shareholders with a total shareholder return of 73% in the last twelve months. That gain is better than the annual TSR over five years, which is 24%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Malaysia Steel Works (KL) Bhd is showing 5 warning signs in our investment analysis , and 2 of those are a bit concerning...

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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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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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