Yahoo Finance Did You Miss Nickel Mines' (ASX:NIC) 28% Share Price Gain?
If you want to compound wealth in the stock market, you can do so by buying an index fund. But investors can boost returns by picking market-beating companies to own shares in. To wit, the Nickel Mines Limited (ASX:NIC) share price is 28% higher than it was a year ago, much better than the market decline of around 18% (not including dividends) in the same period. So that should have shareholders smiling. Nickel Mines hasn't been listed for long, so it's still not clear if it is a long term winner.
See our latest analysis for Nickel Mines
There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
Nickel Mines went from making a loss to reporting a profit, in the last year.
When a company is just on the edge of profitability it can be well worth considering other metrics in order to more precisely gauge growth (and therefore understand share price movements).
However the year on year revenue growth of 3674% would help. Many businesses do go through a phase where they have to forgo some profits to drive business development, and sometimes its for the best.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. If you are thinking of buying or selling Nickel Mines stock, you should check out this free report showing analyst profit forecasts.
A Different Perspective
Nickel Mines boasts a total shareholder return of 28% for the last year. We regret to report that the share price is down 6.0% over ninety days. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. It's always interesting to track share price performance over the longer term. But to understand Nickel Mines better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Nickel Mines (including 2 which is are concerning) .
Nickel Mines is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
