While some are satisfied with an index fund, active investors aim to find truly magnificent investments on the stock market. When you find (and hold) a big winner, you can markedly improve your finances. In the case of China Public Procurement Limited (HKG:1094), the share price is up an incredible 634% in the last year alone. Meanwhile the share price is 10% higher than it was a week ago. Also impressive, the stock is up 263% over three years, making long term shareholders happy, too. We love happy stories like this one. The company should be really proud of that performance!
On the back of a solid 7-day performance, let’s check what role the company’s fundamentals have played in driving long term shareholder returns.
Check out our latest analysis for China Public Procurement
Because China Public Procurement made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Over the last twelve months, China Public Procurement’s revenue grew by 27%. We respect that sort of growth, no doubt. Arguably it’s more than reflected in the truly wondrous share price gain of 634% in the last year. While we are always careful about jumping on a hot stock too late, there’s certainly good reason to keep an eye on China Public Procurement.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. Dive deeper into the earnings by checking this interactive graph of China Public Procurement’s earnings, revenue and cash flow.
A Different Perspective
It’s good to see that China Public Procurement has rewarded shareholders with a total shareholder return of 634% in the last twelve months. There’s no doubt those recent returns are much better than the TSR loss of 10% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. 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. For instance, we’ve identified 3 warning signs for China Public Procurement that you should be aware of.
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
