The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But when you pick a company that is really flourishing, you can make more than 100%. For instance the Opcom Holdings Berhad (KLSE:OPCOM) share price is 183% higher than it was three years ago. How nice for those who held the stock! Then again, the 8.1% share price decline hasn't been so fun for shareholders. This could be related to the soft market, with stocks down around 4.1% in the last month.
Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.
See our latest analysis for Opcom Holdings Berhad
We don't think that Opcom Holdings Berhad's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.
Opcom Holdings Berhad's revenue trended up 25% each year over three years. That's well above most pre-profit companies. Along the way, the share price gained 42% per year, a solid pop by our standards. This suggests the market has recognized the progress the business has made, at least to a significant degree. That's not to say we think the share price is too high. In fact, it might be worth keeping an eye on this one.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
If you are thinking of buying or selling Opcom Holdings Berhad stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
The total return of 3.5% received by Opcom Holdings Berhad shareholders over the last year isn't far from the market return of -3.8%. The silver lining is that longer term investors would have made a total return of 13% per year over half a decade. If the fundamental data remains strong, and the share price is simply down on sentiment, then this could be an opportunity worth investigating. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should learn about the 4 warning signs we've spotted with Opcom Holdings Berhad (including 1 which can't be ignored) .
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.