Yahoo Finanza WMG Holdings Bhd (KLSE:WMG) hikes 46% this week, taking one-year gains to 200%
Unfortunately, investing is risky - companies can and do go bankrupt. But when you pick a company that is really flourishing, you can make more than 100%. For example, the WMG Holdings Bhd. (KLSE:WMG) share price had more than doubled in just one year - up 200%. It's up an even more impressive 200% over the last quarter. It is also impressive that the stock is up 119% over three years, adding to the sense that it is a real winner.
Since the stock has added RM78m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.
View our latest analysis for WMG Holdings Bhd
Because WMG Holdings Bhd 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 desire strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.
Over the last twelve months, WMG Holdings Bhd's revenue grew by 59%. That's well above most other pre-profit companies. Meanwhile, the market has paid attention, sending the share price soaring 200% in response. It's great to see strong revenue growth, but the question is whether it can be sustained. Given the positive sentiment around the stock we're cautious, but there's no doubt its worth watching.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized 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 WMG Holdings Bhd'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 good to see that WMG Holdings Bhd has rewarded shareholders with a total shareholder return of 200% in the last twelve months. That's better than the annualised return of 22% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand WMG Holdings Bhd better, we need to consider many other factors. Even so, be aware that WMG Holdings Bhd is showing 2 warning signs in our investment analysis , and 1 of those is significant...
We will like WMG Holdings Bhd better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Malaysian exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.
