Shareholders are confident in the losses of Shemen Industries (TLV: SMNIN) as the stock climbs 20% last week, taking the year-on-year gain to 187%

Unless you are borrowing money to invest, potential losses are limited. But if you choose the right stock, you can earn a lot Continued more than 100%. For example, the Shemen Industries Ltd (TLV:SMNIN) The stock price soared 187% in a single year. Shareholders also appreciated the 27% gain over the past three months. And shareholders are doing just as well over the long term, with an increase of 176% over the last three years.

Given that the stock has added £57m to its market capitalization in the last week alone, let’s see if the underlying performance has delivered any long-term returns.

Check out our latest analysis for Shemen Industries

Shemen Industries is currently unprofitable, so most analysts would look to revenue growth to get a sense of how fast the underlying business is growing. When a business is not making a profit, you generally expect to see good revenue growth. Indeed, it is difficult to be sure that a business will be sustainable if revenue growth is negligible and it never makes a profit.

Shemen Industries increased its turnover by 291% last year. That’s a head and shoulders above most loss-making companies. Meanwhile, the market paid attention, driving the stock price up 187% in response. This type of revenue growth is sure to attract attention, even if the business is not making a profit. The sharp rise in the stock price indicates optimism, so there could be a better opportunity for buyers as the hype wears off a bit.

The company’s revenues and profits (over time) are shown in the image below (click to see exact figures).

TASE: SMNIN Earnings and Revenue Growth February 21, 2022

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive chart.

A different perspective

We are pleased to report that Shemen Industries shareholders received a one-year total shareholder return of 187%. As the one-year TSR is better than the five-year TSR (the latter standing at 16% per year), it seems that the stock’s performance has improved lately. At best, this may hint at genuine trading momentum, implying that now could be a great time to dig deeper. I find it very interesting to look at stock price over the long term as a proxy for company performance. But to really get insight, we also need to consider other information. Example: we have identified 2 warning signs for Shemen Industries you should know, and one of them makes us a little uneasy.

Sure Shemen Industries may not be the best stock to buy. So you might want to see this free collection of growth values.

Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks currently trading on IL exchanges.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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