Taiwan Wax CompanyLtd (GTSM:1742) Shareholders Booked A 24% Gain In The Last Three Years

Low-cost index funds make it easy to achieve average market returns. But across the board there are plenty of stocks that underperform the market. That's what has happened with the Taiwan Wax Company,Ltd. (GTSM:1742) share price. It's up 24% over three years, but that is below the market return. Unfortunately, the share price has fallen 1.0% over twelve months.

See our latest analysis for Taiwan Wax CompanyLtd

While Taiwan Wax CompanyLtd made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.

Over the last three years Taiwan Wax CompanyLtd has grown its revenue at 44% annually. That's much better than most loss-making companies. While long-term shareholders have made money, the 8% per year gain over three years isn't that great given the rising market. We would have thought the top-line growth might have impressed buyers more. If the business can trend towards profitability and fund its growth, then the market could present an opportunity. But you might want to take a closer look at this one.

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

If you are thinking of buying or selling Taiwan Wax CompanyLtd stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Taiwan Wax CompanyLtd shareholders are down 1.0% for the year, but the market itself is up 26%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 3%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with Taiwan Wax CompanyLtd , and understanding them should be part of your investment process.

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 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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