Can You Imagine How Jubilant Kao Hsing Chang Iron & Steel's (TPE:2008) Shareholders Feel About Its 135% Share Price Gain?

When you buy a stock there is always a possibility that it could drop 100%. But on a lighter note, a good company can see its share price rise well over 100%. Long term Kao Hsing Chang Iron & Steel Corp. (TPE:2008) shareholders would be well aware of this, since the stock is up 135% in five years. In more good news, the share price has risen -7.6% in thirty days.

View our latest analysis for Kao Hsing Chang Iron & Steel

Given that Kao Hsing Chang Iron & Steel 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. 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.

Over the last half decade Kao Hsing Chang Iron & Steel's revenue has actually been trending down at about 2.0% per year. Given that scenario, we wouldn't have expected the share price to rise 19% per year, but that's what it did. It's a good reminder that expectations about the future, not the past history, always impact share prices. Still, we are a bit cautious in this kind of situation.

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

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

A Different Perspective

We're pleased to report that Kao Hsing Chang Iron & Steel shareholders have received a total shareholder return of 49% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 19% per year), it would seem that the stock's performance has improved in recent times. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Kao Hsing Chang Iron & Steel (at least 2 which are concerning) , and understanding them should be part of your investment process.

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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