Yahoo Finance Should Ainsworth Game Technology (ASX:AGI) Be Disappointed With Their 93% Profit?
Passive investing in index funds can generate returns that roughly match the overall market. But you can significantly boost your returns by picking above-average stocks. To wit, the Ainsworth Game Technology Limited (ASX:AGI) share price is 93% higher than it was a year ago, much better than the market return of around 26% (not including dividends) in the same period. That's a solid performance by our standards! Zooming out, the stock is actually down 13% in the last three years.
Check out our latest analysis for Ainsworth Game Technology
Because Ainsworth Game Technology 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. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
In the last year Ainsworth Game Technology saw its revenue shrink by 49%. The stock is up 93% in that time, a fine performance given the revenue drop. To us that means that there isn't a lot of correlation between the past revenue performance and the share price, but a closer look at analyst forecasts and the bottom line may well explain a lot.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
This free interactive report on Ainsworth Game Technology's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
It's nice to see that Ainsworth Game Technology shareholders have received a total shareholder return of 93% over the last year. There's no doubt those recent returns are much better than the TSR loss of 10% per year over five years. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. It's always interesting to track share price performance over the longer term. But to understand Ainsworth Game Technology better, we need to consider many other factors. Even so, be aware that Ainsworth Game Technology is showing 1 warning sign in our investment analysis , you should know about...
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.
This article by Simply Wall St is general in nature. 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.
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