Even though Advenica (STO:ADVE) has lost kr91m market cap in last 7 days, shareholders are still up 435% over 3 years

It's been a soft week for Advenica AB (publ) (STO:ADVE) shares, which are down 13%. But over three years the performance has been really wonderful. Indeed, the share price is up a whopping 377% in that time. Arguably, the recent fall is to be expected after such a strong rise. The thing to consider is whether there is still too much elation around the company's prospects.

Although Advenica has shed kr91m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

See our latest analysis for Advenica

Given that Advenica 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. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last 3 years Advenica saw its revenue grow at 15% per year. That's pretty nice growth. Some shareholders might think that the share price rise of 68% per year is a lucky result, considering the level of revenue growth. A hot stock like this is usually well worth taking a closer look at, as long as you don't let the fear of missing out (FOMO) impact your thinking.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

What about the Total Shareholder Return (TSR)?

We've already covered Advenica's share price action, but we should also mention its total shareholder return (TSR). 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. We note that Advenica's TSR, at 435% is higher than its share price return of 377%. When you consider it hasn't been paying a dividend, this data suggests shareholders have benefitted from a spin-off, or had the opportunity to acquire attractively priced shares in a discounted capital raising.

A Different Perspective

It's good to see that Advenica has rewarded shareholders with a total shareholder return of 220% in the last twelve months. That gain is better than the annual TSR over five years, which is 4%. 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. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For example, we've discovered 4 warning signs for Advenica (1 is a bit concerning!) that you should be aware of before investing here.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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. 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.