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When you buy shares in a company, there is always a risk that the price drops to zero. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! For example, the SANUWAVE Health, Inc. (NASDAQ:SNWV) share price has soared 278% return in just a single year. It's also good to see the share price up 62% over the last quarter. Unfortunately the longer term returns are not so good, with the stock falling 35% in the last three years.
Since it's been a strong week for SANUWAVE Health shareholders, let's have a look at trend of the longer term fundamentals.
See our latest analysis for SANUWAVE Health
Because SANUWAVE Health 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. When a company doesn't make profits, we'd generally hope to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
SANUWAVE Health grew its revenue by 55% last year. That's well above most other pre-profit companies. And the share price has responded, gaining 278% as we previously mentioned. That sort of revenue growth is bound to attract attention, even if the company doesn't turn a profit. The strong share price rise indicates optimism, so there may be a better opportunity for buyers as the hype fades a bit.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
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. It might be well worthwhile taking a look at our free report on SANUWAVE Health's earnings, revenue and cash flow.
A Different Perspective
It's nice to see that SANUWAVE Health shareholders have received a total shareholder return of 278% over the last year. There's no doubt those recent returns are much better than the TSR loss of 11% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand SANUWAVE Health better, we need to consider many other factors. Even so, be aware that SANUWAVE Health is showing 2 warning signs in our investment analysis , you should know about...
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: most of them are flying under the radar).