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The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But if you buy shares in a really great company, you can more than double your money. To wit, the Austar Lifesciences Limited (HKG:6118) share price has flown 287% in the last three years. How nice for those who held the stock! Then again, the 9.6% share price decline hasn't been so fun for shareholders. This could be related to the recent financial results, released recently - you can catch up on the most recent data by reading our company report.
Check out our latest analysis for Austar Lifesciences
We don't think that Austar Lifesciences's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.
Over the last three years Austar Lifesciences has grown its revenue at 13% annually. That's a very respectable growth rate. Broadly speaking, this solid progress may well be reflected by the healthy share price gain of 57% per year over three years. It's hard to value pre-profit businesses, but it seems like the market has become a lot more optimistic about this one! It would be worth thinking about when profits will flow, since that milestone will attract more attention.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here..
A Different Perspective
We're pleased to report that Austar Lifesciences rewarded shareholders with a total shareholder return of 62% over the last year. So this year's TSR was actually better than the three-year TSR (annualized) of 57%. Given the track record of solid returns over varying time frames, it might be worth putting Austar Lifesciences on your watchlist. Before spending more time on Austar Lifesciences it might be wise to click here to see if insiders have been buying or selling shares.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).