Is Nama Chemicals' (TADAWUL:2210) 133% Share Price Increase Well Justified?

When you buy shares in a company, there is always a risk that the price drops to zero. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Nama Chemicals Co. (TADAWUL:2210) share price has soared 133% in the last year. Most would be very happy with that, especially in just one year! It's also up 12% in about a month. Looking back further, the stock price is 108% higher than it was three years ago.

View our latest analysis for Nama Chemicals

Nama Chemicals 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last year Nama Chemicals saw its revenue shrink by 18%. We're a little surprised to see the share price pop 133% in the last year. It just goes to show the market doesn't always pay attention to the reported numbers. It's quite likely the revenue fall was already priced in, anyway.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

This free interactive report on Nama Chemicals' 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 Nama Chemicals has rewarded shareholders with a total shareholder return of 133% in the last twelve months. That's better than the annualised return of 2% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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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