If you want to compound wealth in the stock market, you can do so by buying an index fund. But investors can boost returns by picking market-beating companies to own shares in. To wit, the Great Elm Capital Group, Inc. (NASDAQ:GEC) share price is 20% higher than it was a year ago, much better than the market return of around 5.9% (not including dividends) in the same period. That’s a solid performance by our standards! Great Elm Capital Group hasn’t been listed for long, so it’s still not clear if it is a long term winner.
Great Elm Capital Group isn’t a profitable company, so it is unlikely we’ll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn’t make profits, we’d generally expect to see good revenue growth. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last year Great Elm Capital Group saw its revenue grow by 200%. That’s a head and shoulders above most loss-making companies. While the share price gain of 20% over twelve months is pretty tasty, you might argue it doesn’t fully reflect the strong revenue growth. So quite frankly it could be a good time to investigate Great Elm Capital Group in some detail. Since we evolved from monkeys, we think in linear terms by nature. So if growth goes exponential, opportunity may exist for the enlightened.
Depicted in the graphic below, you’ll see revenue and earnings over time. If you want more detail, you can click on the chart itself.
We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. Dive deeper into the earnings by checking this interactive graph of Great Elm Capital Group’s earnings, revenue and cash flow.
A Different Perspective
Great Elm Capital Group boasts a total shareholder return of 20% for the last year. And the share price momentum remains respectable, with a gain of 35% in the last three months. This suggests the company is continuing to win over new investors. It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.
Great Elm Capital Group is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.