The Hua Jung ComponentsLtd (GTSM:5328) Share Price Has Gained 121%, So Why Not Pay It Some Attention?

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 Hua Jung Components Co.,Ltd. (GTSM:5328) shareholders would be well aware of this, since the stock is up 121% in five years. It's also good to see the share price up 27% over the last quarter.

View our latest analysis for Hua Jung ComponentsLtd

While Hua Jung ComponentsLtd 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. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

Over the last half decade Hua Jung ComponentsLtd's revenue has actually been trending down at about 8.2% per year. Given that scenario, we wouldn't have expected the share price to rise 17% per year, but that's what it did. It just goes to show tht the market is forward looking, and it's not always easy to predict the future based on past trends. Still, we are a bit cautious in this kind of situation.

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 Hua Jung ComponentsLtd stock, you should check out this FREE detailed report on its balance sheet.

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between Hua Jung ComponentsLtd's total shareholder return (TSR) and its share price change, which we've covered above. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Its history of dividend payouts mean that Hua Jung ComponentsLtd's TSR of 129% over the last 5 years is better than the share price return.

A Different Perspective

It's nice to see that Hua Jung ComponentsLtd shareholders have received a total shareholder return of 60% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 18% 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. 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 2 warning signs for Hua Jung ComponentsLtd that you should be aware of before investing here.

We will like Hua Jung ComponentsLtd better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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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