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Passive investing in index funds can generate returns that roughly match the overall market. But if you pick the right individual stocks, you could make more than that. For example, the Sanco Industries Limited (NSE:SANCO) share price is up 30% in the last year, clearly besting the market return of around -6.2% (not including dividends). If it can keep that out-performance up over the long term, investors will do very well! Sanco Industries hasn't been listed for long, so it's still not clear if it is a long term winner.
See our latest analysis for Sanco Industries
Given that Sanco Industries only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. 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.
Sanco Industries actually shrunk its revenue over the last year, with a reduction of 35%. The stock is up 30% in that time, a fine performance given the revenue drop. We can correlate the share price rise with revenue or profit growth, but it seems the market had previously expected weaker results, and sentiment around the stock is improving.
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. Dive deeper into the earnings by checking this interactive graph of Sanco Industries's earnings, revenue and cash flow.
A Different Perspective
Sanco Industries boasts a total shareholder return of 30% for the last year. The more recent returns haven't been as impressive as the longer term returns, coming in at just 5.9%. It seems likely the market is waiting on fundamental developments with the business before pushing the share price higher (or lower). If you would like to research Sanco Industries in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
We will like Sanco Industries 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 IN exchanges.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.