It hasn't been the best quarter for Malath Cooperative Insurance Company (TADAWUL:8020) shareholders, since the share price has fallen 25% in that time. In contrast, the return over three years has been impressive. In fact, the share price is up a full 104% compared to three years ago. It's not uncommon to see a share price retrace a bit, after a big gain. Only time will tell if there is still too much optimism currently reflected in the share price.
Although Malath Cooperative Insurance has shed ر.س190m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.
Malath Cooperative Insurance isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last 3 years Malath Cooperative Insurance saw its revenue grow at 7.5% per year. That's not a very high growth rate considering it doesn't make profits. In contrast, the stock has popped 27% per year in that time - an impressive result. 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. It may be that the market is pretty optimistic about Malath Cooperative Insurance if you look to the bottom line.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. This free interactive report on Malath Cooperative Insurance's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
It's good to see that Malath Cooperative Insurance has rewarded shareholders with a total shareholder return of 45% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 14% per year), it would seem that the stock's performance has improved in recent times. 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 Malath Cooperative Insurance better, we need to consider many other factors. Even so, be aware that Malath Cooperative Insurance is showing 1 warning sign in our investment analysis , you should know about...
We will like Malath Cooperative Insurance 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.
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.
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