The 14% return this week takes MoneyGram International's (NASDAQ:MGI) shareholders three-year gains to 357%

We think that it's fair to say that the possibility of finding fantastic multi-year winners is what motivates many investors. Not every pick can be a winner, but when you pick the right stock, you can win big. One bright shining star stock has been MoneyGram International, Inc. (NASDAQ:MGI), which is 357% higher than three years ago. On top of that, the share price is up 43% in about a quarter.

Since the stock has added US$104m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

Check out our latest analysis for MoneyGram International

Given that MoneyGram International 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 expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

MoneyGram International actually saw its revenue drop by 5.6% per year over three years. So it's pretty amazing to see the stock price has zoomed up 66% per year in that time. This clear lack of correlation between revenue and share price is surprising to see in a money losing company. At the risk of upsetting holders, this does suggest that hope for a better future is playing a significant role in the share price action.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth

It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. You can see what analysts are predicting for MoneyGram International in this interactive graph of future profit estimates.

A Different Perspective

We're pleased to report that MoneyGram International shareholders have received a total shareholder return of 39% over one year. Notably the five-year annualised TSR loss of 5% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand MoneyGram International better, we need to consider many other factors. Take risks, for example - MoneyGram International has 3 warning signs (and 1 which shouldn't be ignored) we think you should know about.

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 US 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.