Australia markets close in 1 hour 25 minutes
  • ALL ORDS

    7,615.60
    +52.50 (+0.69%)
     
  • ASX 200

    7,318.30
    +44.50 (+0.61%)
     
  • AUD/USD

    0.7242
    +0.0009 (+0.12%)
     
  • OIL

    70.51
    -0.05 (-0.07%)
     
  • GOLD

    1,777.10
    -1.10 (-0.06%)
     
  • BTC-AUD

    57,899.83
    -930.12 (-1.58%)
     
  • CMC Crypto 200

    1,036.48
    -27.36 (-2.57%)
     
  • AUD/EUR

    0.6176
    +0.0014 (+0.22%)
     
  • AUD/NZD

    1.0329
    +0.0011 (+0.11%)
     
  • NZX 50

    13,226.48
    +49.54 (+0.38%)
     
  • NASDAQ

    15,027.77
    +15.58 (+0.10%)
     
  • FTSE

    6,980.98
    +77.07 (+1.12%)
     
  • Dow Jones

    33,919.84
    -50.63 (-0.15%)
     
  • DAX

    15,348.53
    +216.47 (+1.43%)
     
  • Hang Seng

    24,221.54
    +122.40 (+0.51%)
     
  • NIKKEI 225

    29,615.02
    -224.69 (-0.75%)
     

The Inspecs Group (LON:SPEC) Share Price Has Gained 59% And Shareholders Are Hoping For More

  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
·2-min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.
  • Oops!
    Something went wrong.
    Please try again later.

If you want to compound wealth in the stock market, you can do so by buying an index fund. But you can significantly boost your returns by picking above-average stocks. To wit, the Inspecs Group plc (LON:SPEC) share price is 59% higher than it was a year ago, much better than the market return of around 17% (not including dividends) in the same period. If it can keep that out-performance up over the long term, investors will do very well! We'll need to follow Inspecs Group for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

See our latest analysis for Inspecs Group

Inspecs Group wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Inspecs Group actually shrunk its revenue over the last year, with a reduction of 22%. Despite the lack of revenue growth, the stock has returned a solid 59% the last twelve months. We can correlate the share price rise with revenue or profit growth, but it seems the market had previously expected weaker results, and sentiment around the stock is improving.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth
earnings-and-revenue-growth

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

It's nice to see that Inspecs Group shareholders have gained 59% over the last year. The more recent returns haven't been as impressive as the longer term returns, coming in at just 1.2%. It seems likely the market is waiting on fundamental developments with the business before pushing the share price higher (or lower). 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. Case in point: We've spotted 3 warning signs for Inspecs Group you should be aware of, and 2 of them can't be ignored.

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 GB 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting