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While stock picking isn't easy, for those willing to persist and learn, it is possible to buy shares in great companies, and generate wonderful returns. When an investor finds a multi-bagger (a stock that goes up over 200%), it makes a big difference to their portfolio. For example, the FreightCar America, Inc. (NASDAQ:RAIL) share price rocketed moonwards 353% in just one year. It's also good to see the share price up 275% over the last quarter. It is also impressive that the stock is up 183% over three years, adding to the sense that it is a real winner.
On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.
Check out our latest analysis for FreightCar America
FreightCar America isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally hope to see good 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.
FreightCar America grew its revenue by 29% last year. We respect that sort of growth, no doubt. Arguably it's more than reflected in the truly wondrous share price gain of 353% in the last year. We're always cautious when the share price is up so much, but there's certainly enough revenue growth to justify taking a closer look at FreightCar America.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. You can see what analysts are predicting for FreightCar America in this interactive graph of future profit estimates.
A Different Perspective
We're pleased to report that FreightCar America shareholders have received a total shareholder return of 353% over one year. That's better than the annualised return of 23% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand FreightCar America better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with FreightCar America , and understanding them should be part of your investment process.