Philly Shipyard (OB:PHLY) pops 20% this week, taking five-year gains to 71%

Stock pickers are generally looking for stocks that will outperform the broader market. And in our experience, buying the right stocks can give your wealth a significant boost. For example, long term Philly Shipyard ASA (OB:PHLY) shareholders have enjoyed a 71% share price rise over the last half decade, well in excess of the market return of around 19% (not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 30% in the last year.

Since it's been a strong week for Philly Shipyard shareholders, let's have a look at trend of the longer term fundamentals.

View our latest analysis for Philly Shipyard

Given that Philly Shipyard 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. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last 5 years Philly Shipyard saw its revenue grow at 40% per year. That's well above most pre-profit companies. It's good to see that the stock has 11%, but not entirely surprising given revenue shows strong growth. If the strong revenue growth continues, we'd expect 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).

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

A Different Perspective

It's good to see that Philly Shipyard has rewarded shareholders with a total shareholder return of 30% in the last twelve months. That gain is better than the annual TSR over five years, which is 11%. 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 Philly Shipyard better, we need to consider many other factors. For instance, we've identified 2 warning signs for Philly Shipyard (1 can't be ignored) that you should be aware of.

But note: Philly Shipyard 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 Norwegian 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.