These days it’s easy to simply buy an index fund, and your returns should (roughly) match the market. But you can significantly boost your returns by picking above-average stocks. For example, the Alcidion Group Limited (ASX:ALC) share price is up 60% in the last year, clearly besting than the market return of around 2.2% (not including dividends). If it can keep that out-performance up over the long term, investors will do very well! However, the stock hasn’t done so well in the longer term, with the stock only up 21% in three years.
Alcidion Group 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Over the last twelve months, Alcidion Group’s revenue grew by 188%. That’s stonking growth even when compared to other loss-making stocks. The solid 60% share price gain goes down pretty well, but it’s not necessarily as good as you might expect given the top notch revenue growth. So quite frankly it could be a good time to investigate Alcidion Group in some detail. Since we evolved from monkeys, we think in linear terms by nature. So if growth goes exponential, opportunity may exist for the enlightened.
Depicted in the graphic below, you’ll see revenue and earnings over time. If you want more detail, you can click on the chart itself.
We like that insiders have been buying shares in the last twelve months. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. This free interactive report on Alcidion Group’s earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.
A Different Perspective
We’re pleased to report that Alcidion Group rewarded shareholders with a total shareholder return of 60% over the last year. That gain actually surpasses the 6.5% TSR it generated (per year) over three years. These improved returns may hint at some real business momentum, implying that now could be a great time to delve deeper. If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares – and the price they paid.
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.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.