While stock picking isn't easy, for those willing to persist and learn, it is possible to buy shares in great companies, and generate wonderful returns. When you buy and hold the right company, the returns can make a huge difference to both you and your family. For example, Summi (Group) Holdings Limited (HKG:756) has generated a beautiful 317% return in just a single year. It's up an even more impressive 324% over the last quarter. And shareholders have also done well over the long term, with an increase of 148% in the last three years.
On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.
Check out our latest analysis for Summi (Group) Holdings
Summi (Group) 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last year Summi (Group) Holdings saw its revenue shrink by 29%. So it's very confusing to see that the share price gained a whopping 317%. It's pretty clear the market isn't basing its valuation on fundamental metrics like revenue. To us, a gain like this looks like speculation, but there might be historical trends to back it up.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
SEHK:756 Earnings and Revenue Growth December 23rd 2023
This free interactive report on Summi (Group) Holdings' balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
It's good to see that Summi (Group) Holdings has rewarded shareholders with a total shareholder return of 317% in the last twelve months. That's better than the annualised return of 5% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. Take risks, for example - Summi (Group) Holdings has 5 warning signs (and 3 which are a bit concerning) we think you should know about.
Of course Summi (Group) Holdings may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Hong Kong exchanges.
Have feedback on this article? Concerned about the content?Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com. 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.
