Does Kuo Toong International's (GTSM:8936) Share Price Gain of 66% Match Its Business Performance?

These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But if you pick the right individual stocks, you could make more than that. To wit, the Kuo Toong International Co., Ltd. (GTSM:8936) share price is 66% higher than it was a year ago, much better than the market return of around 45% (not including dividends) in the same period. That's a solid performance by our standards! Also impressive, the stock is up 52% over three years, making long term shareholders happy, too.

See our latest analysis for Kuo Toong International

Given that Kuo Toong International only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

In the last year Kuo Toong International saw its revenue shrink by 20%. Despite the lack of revenue growth, the stock has returned a solid 66% the last twelve months. We can correlate the share price rise with revenue or profit growth, but it seems the market had previously expected weaker results, and sentiment around the stock is improving.

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

If you are thinking of buying or selling Kuo Toong International stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We're pleased to report that Kuo Toong International shareholders have received a total shareholder return of 68% over one year. That's including the dividend. That gain is better than the annual TSR over five years, which is 2%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better 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. Take risks, for example - Kuo Toong International has 4 warning signs (and 1 which is significant) we think you should know about.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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