When you buy a stock there is always a possibility that it could drop 100%. But when you pick a company that is really flourishing, you can make more than 100%. Long term Genco Shipping & Trading Limited (NYSE:GNK) shareholders would be well aware of this, since the stock is up 220% in five years. Also pleasing for shareholders was the 52% gain in the last three months.
Check out our latest analysis for Genco Shipping & Trading
Given that Genco Shipping & Trading 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. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last 5 years Genco Shipping & Trading saw its revenue grow at 22% per year. That's well above most pre-profit companies. So it's not entirely surprising that the share price reflected this performance by increasing at a rate of 26% per year, in that time. This suggests the market has well and truly recognized the progress the business has made. Genco Shipping & Trading seems like a high growth stock - so growth investors might want to add it to their watchlist.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
This free interactive report on Genco Shipping & Trading's balance sheet strength is a great place to start, if you want to investigate the stock further.
What About Dividends?
As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Genco Shipping & Trading the TSR over the last 5 years was 249%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!
A Different Perspective
It's good to see that Genco Shipping & Trading has rewarded shareholders with a total shareholder return of 163% in the last twelve months. And that does include the dividend. That's better than the annualised return of 28% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Genco Shipping & Trading , and understanding them should be part of your investment process.