Introducing LEATEC Fine Ceramics (GTSM:6127), The Stock That Zoomed 185% In The Last Five Years

When you buy a stock there is always a possibility that it could drop 100%. But when you pick a company that is really flourishing, you can make more than 100%. For instance, the price of LEATEC Fine Ceramics Co., Ltd. (GTSM:6127) stock is up an impressive 185% over the last five years. It's also good to see the share price up 32% over the last quarter. But this move may well have been assisted by the reasonably buoyant market (up 21% in 90 days).

Check out our latest analysis for LEATEC Fine Ceramics

LEATEC Fine Ceramics isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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.

In the last 5 years LEATEC Fine Ceramics saw its revenue shrink by 7.0% per year. Given that scenario, we wouldn't have expected the share price to rise 23% 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, this situation makes us a little wary of the stock.

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

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

What about the Total Shareholder Return (TSR)?

We've already covered LEATEC Fine Ceramics' share price action, but we should also mention its total shareholder return (TSR). Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Its history of dividend payouts mean that LEATEC Fine Ceramics' TSR of 192% over the last 5 years is better than the share price return.

A Different Perspective

It's nice to see that LEATEC Fine Ceramics shareholders have received a total shareholder return of 47% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 24% per year), it would seem that the stock's performance has improved in recent times. 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 LEATEC Fine Ceramics better, we need to consider many other factors. Take risks, for example - LEATEC Fine Ceramics has 4 warning signs (and 2 which are potentially serious) we think you should know about.

Of course LEATEC Fine Ceramics may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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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