Investors in Mieco Chipboard Berhad (KLSE:MIECO) have seen solid returns of 292% over the past five years
The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Mieco Chipboard Berhad (KLSE:MIECO) share price has soared 292% in the last half decade. Most would be very happy with that.
With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
See our latest analysis for Mieco Chipboard Berhad
Given that Mieco Chipboard Berhad didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually desire strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Over the last half decade Mieco Chipboard Berhad's revenue has actually been trending down at about 6.4% per year. Given that scenario, we wouldn't have expected the share price to rise 31% per year, but that's what it did. It's a good reminder that expectations about the future, not the past history, always impact share prices. Still, this situation makes us a little wary of the stock.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
This free interactive report on Mieco Chipboard Berhad's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
Mieco Chipboard Berhad provided a TSR of 4.8% over the last twelve months. But that return falls short of the market. It's probably a good sign that the company has an even better long term track record, having provided shareholders with an annual TSR of 31% over five years. It's quite possible the business continues to execute with prowess, even as the share price gains are slowing. 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. Even so, be aware that Mieco Chipboard Berhad is showing 1 warning sign in our investment analysis , you should know about...
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Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Malaysian 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.