When you buy shares in a company, there is always a risk that the price drops to zero. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Global Ports Holding Plc (LON:GPH) share price has soared 138% in the last year. Most would be very happy with that, especially in just one year! On top of that, the share price is up 47% in about a quarter. Zooming out, the stock is actually down 74% in the last three years.
See our latest analysis for Global Ports Holding
Given that Global Ports Holding 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. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
Global Ports Holding actually shrunk its revenue over the last year, with a reduction of 38%. So we would not have expected the share price to rise 138%. 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.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
This free interactive report on Global Ports Holding's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
It's nice to see that Global Ports Holding shareholders have gained 138% (in total) over the last year. What is absolutely clear is that is far preferable to the dismal 19% average annual loss suffered over the last three years. We're generally cautious about putting too much weigh on shorter term data, but the recent improvement is definitely a positive. 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. Case in point: We've spotted 2 warning signs for Global Ports Holding you should be aware of, and 1 of them can't be ignored.
We will like Global Ports Holding 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 GB exchanges.
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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