Did You Miss Rectron's (TPE:2302) Impressive 293% Share Price Gain?

When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But when you pick a company that is really flourishing, you can make more than 100%. One great example is Rectron Limited (TPE:2302) which saw its share price drive 293% higher over five years. On top of that, the share price is up 33% in about a quarter. But this could be related to the strong market, which is up 19% in the last three months.

See our latest analysis for Rectron

While Rectron 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. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.

In the last 5 years Rectron saw its revenue grow at 0.06% per year. Put simply, that growth rate fails to impress. So we wouldn't have expected to see the share price to have lifted 32% for each year during that time, but that's what happened. Shareholders should be pretty happy with that, although interested investors might want to examine the financial data more closely to see if the gains are really justified. Some might suggest that the sentiment around the stock is rather positive.

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 Rectron stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's nice to see that Rectron shareholders have received a total shareholder return of 173% over the last year. That gain is better than the annual TSR over five years, which is 32%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Rectron better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Rectron you should be aware of, and 1 of them is a bit concerning.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can 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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