Stock Analysis

Introducing ArcelorMittal South Africa (JSE:ACL), The Stock That Zoomed 145% In The Last Year

JSE:ACL
Source: Shutterstock

When you buy shares in a company, there is always a risk that the price drops to zero. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! Take, for example ArcelorMittal South Africa Ltd (JSE:ACL). Its share price is already up an impressive 145% in the last twelve months. Better yet, the share price has gained 458% in the last quarter. Zooming out, the stock is actually down 13% in the last three years.

Check out our latest analysis for ArcelorMittal South Africa

Because ArcelorMittal South Africa made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last year ArcelorMittal South Africa saw its revenue shrink by 40%. So we would not have expected the share price to rise 145%. This is a good example of how buyers can push up prices even before the fundamental metrics show much growth. It's quite likely the revenue fall was already priced in, anyway.

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

earnings-and-revenue-growth
JSE:ACL Earnings and Revenue Growth February 21st 2021

If you are thinking of buying or selling ArcelorMittal South Africa stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We're pleased to report that ArcelorMittal South Africa shareholders have received a total shareholder return of 145% over one year. There's no doubt those recent returns are much better than the TSR loss of 10% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for ArcelorMittal South Africa you should know about.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on ZA exchanges.

If you decide to trade ArcelorMittal South Africa, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted


Valuation is complex, but we're helping make it simple.

Find out whether ArcelorMittal South Africa is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020


Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.