When you buy shares in a company, there is always a risk that the price drops to zero. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! Take, for example Salutica Berhad (KLSE:SALUTE). Its share price is already up an impressive 138% in the last twelve months. And in the last week the share price has popped 32%. It is also impressive that the stock is up 58% over three years, adding to the sense that it is a real winner.
The past week has proven to be lucrative for Salutica Berhad investors, so let's see if fundamentals drove the company's one-year performance.
See our latest analysis for Salutica Berhad
Salutica Berhad wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Salutica Berhad actually shrunk its revenue over the last year, with a reduction of 58%. We're a little surprised to see the share price pop 138% in the last year. It just goes to show the market doesn't always pay attention to the reported numbers. It's quite likely the revenue fall was already priced in, anyway.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. Dive deeper into the earnings by checking this interactive graph of Salutica Berhad's earnings, revenue and cash flow.
A Different Perspective
We're pleased to report that Salutica Berhad shareholders have received a total shareholder return of 138% over one year. That's better than the annualised return of 7% 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. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 3 warning signs for Salutica Berhad you should be aware of, and 2 of them are a bit unpleasant.