The Dignitana AB (publ.) (STO:DIGN) Share Price Is Up 123% And Shareholders Are Boasting About It

The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But if you buy shares in a really great company, you can more than double your money. To wit, the Dignitana AB (publ.) (STO:DIGN) share price has flown 123% in the last three years. How nice for those who held the stock! In the last week shares have slid back 1.4%.

See our latest analysis for Dignitana AB (publ.)

Because Dignitana AB (publ.) 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Dignitana AB (publ.)'s revenue trended up 25% each year over three years. That's well above most pre-profit companies. Meanwhile, the share price performance has been pretty solid at 31% compound over three years. But it does seem like the market is paying attention to strong revenue growth. That's not to say we think the share price is too high. In fact, it might be worth keeping an eye on this one.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

This free interactive report on Dignitana AB (publ.)'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'd be remiss not to mention the difference between Dignitana AB (publ.)'s total shareholder return (TSR) and its share price return. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Dignitana AB (publ.) hasn't been paying dividends, but its TSR of 128% exceeds its share price return of 123%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.

A Different Perspective

While the broader market gained around 19% in the last year, Dignitana AB (publ.) shareholders lost 7.6%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. However, the loss over the last year isn't as bad as the 6% per annum loss investors have suffered over the last half decade. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. It's always interesting to track share price performance over the longer term. But to understand Dignitana AB (publ.) better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Dignitana AB (publ.) (of which 1 makes us a bit uncomfortable!) you should know about.

Of course Dignitana AB (publ.) may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on SE 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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