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Active investing isn't easy, but for those that do it, the aim is to find the best companies to buy, and to profit handsomely. When you find (and hold) a big winner, you can markedly improve your finances. For example, WhiteHawk Limited (ASX:WHK) has generated a beautiful 381% return in just a single year. Also pleasing for shareholders was the 88% gain in the last three months. And shareholders have also done well over the long term, with an increase of 56% in the last three years.
WhiteHawk isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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.
WhiteHawk grew its revenue by 140% last year. That's well above most other pre-profit companies. But the share price seems headed to the moon, up 381% as previously highlighted. Even the most bullish shareholders might be thinking that the share price might drop back a bit, after a gain like that. So this looks like a great watchlist candidate for investors who look for high growth inflexion points.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. This free interactive report on WhiteHawk's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
It's nice to see that WhiteHawk shareholders have gained 381% (in total) over the last year. So this year's TSR was actually better than the three-year TSR (annualized) of 17%. Given the track record of solid returns over varying time frames, it might be worth putting WhiteHawk on your watchlist. It's always interesting to track share price performance over the longer term. But to understand WhiteHawk better, we need to consider many other factors. Take risks, for example - WhiteHawk has 5 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
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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