The simplest way to invest in stocks is to buy exchange traded funds. But investors can boost returns by picking market-beating companies to own shares in. For example, the PEXA Group Limited (ASX:PXA) share price is up 14% in the last 1 year, clearly besting the market return of around 11% (not including dividends). So that should have shareholders smiling. We'll need to follow PEXA Group for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.
So let's assess the underlying fundamentals over the last 1 year and see if they've moved in lock-step with shareholder returns.
Check out our latest analysis for PEXA Group
While PEXA Group made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.
PEXA Group grew its revenue by 3.2% last year. That's not great considering the company is losing money. The modest growth is probably largely reflected in the share price, which is up 14%. That's not a standout result, but it is solid - much like the level of revenue growth. Given the market doesn't seem too excited about the stock, a closer look at the financial data could pay off, if you can find indications of a stronger growth trend in the future.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
We know that PEXA Group has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on PEXA Group's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
We're happy to report that PEXA Group are up 14% over the year. While it's always nice to make a profit on the stock market, we do note that the TSR was no better than the broader market return of about 16%. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Australian exchanges.