Cameo Communications (TWSE:6142) shareholder returns have been , earning 24% in 5 years

When you buy and hold a stock for the long term, you definitely want it to provide a positive return. Better yet, you'd like to see the share price move up more than the market average. But Cameo Communications, Inc. (TWSE:6142) has fallen short of that second goal, with a share price rise of 22% over five years, which is below the market return. Looking at the last year alone, the stock is up 12%.

Since the stock has added NT$397m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

View our latest analysis for Cameo Communications

Given that Cameo Communications 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last 5 years Cameo Communications saw its revenue shrink by 6.4% per year. The falling revenue is arguably somewhat reflected in the lacklustre return of 4% per year over that time. That's pretty decent given the top line decline, and lack of profits. Of course, a closer look at the bottom line - and any available analyst forecasts - could reveal an opportunity (if they point to future growth).

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

Take a more thorough look at Cameo Communications' financial health with this free report on its balance sheet.

What About The Total Shareholder Return (TSR)?

Investors should note that there's a difference between Cameo Communications' total shareholder return (TSR) and its share price change, which we've covered above. 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. Cameo Communications' TSR of 24% for the 5 years exceeded its share price return, because it has paid dividends.

A Different Perspective

Cameo Communications shareholders are up 12% for the year. But that return falls short of the market. On the bright side, that's still a gain, and it's actually better than the average return of 4% over half a decade It is possible that returns will improve along with the business fundamentals. You could get a better understanding of Cameo Communications' growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

Of course Cameo Communications 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 Taiwanese exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.