When you buy shares in a company, there is always a risk that the price drops to zero. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Al-Baha Investment & Development Co. (TADAWUL:4130) share price has soared 233% return in just a single year. Looking back further, the stock price is 90% higher than it was three years ago.
Given that Al-Baha Investment & Development 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.
Over the last twelve months, Al-Baha Investment & Development's revenue grew by 19%. That's a fairly respectable growth rate. The revenue growth is decent but the share price had an even better year, gaining 233%. If the profitability is on the horizon then now could be a very exciting time to be a shareholder. But investors need to be wary of how the 'fear of missing out' could influence them to buy without doing thorough research.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
Take a more thorough look at Al-Baha Investment & Development's financial health with this free report on its balance sheet.
A Different Perspective
We're pleased to report that Al-Baha Investment & Development rewarded shareholders with a total shareholder return of 233% over the last year. So this year's TSR was actually better than the three-year TSR (annualized) of 24%. The improving returns to shareholders suggests the stock is becoming more popular 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. Even so, be aware that Al-Baha Investment & Development is showing 2 warning signs in our investment analysis , and 1 of those is concerning...
We will like Al-Baha Investment & Development better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on SA 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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