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Unfortunately, investing is risky - companies can and do go bankrupt. But if you pick the right stock, you can make a lot more than 100%. Take, for example Cool Link (Holdings) Limited (HKG:8491). Its share price is already up an impressive 112% in the last twelve months. Meanwhile the share price is 2.6% higher than it was a week ago. Note that businesses generally develop over the long term, so the returns over the last year might not reflect a long term trend.
See our latest analysis for Cool Link (Holdings)
Cool Link (Holdings) 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. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
Cool Link (Holdings) actually shrunk its revenue over the last year, with a reduction of 6.4%. So we would not have expected the share price to rise 112%. It just goes to show the market doesn't always pay attention to the reported numbers. It's quite likely the revenue fall was already priced in, anyway.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. Dive deeper into the earnings by checking this interactive graph of Cool Link (Holdings)'s earnings, revenue and cash flow.
A Different Perspective
Cool Link (Holdings) boasts a total shareholder return of 112% for the last year. That's better than the more recent three month gain of 2.1%, implying that share price has plateaued recently. It seems likely the market is waiting on fundamental developments with the business before pushing the share price higher (or lower). It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.
Cool Link (Holdings) 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 HK 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 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. Thank you for reading.