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Despite shrinking by HK$405m in the past week, OCI International Holdings (HKG:329) shareholders are still up 174% over 3 years

Simply Wall St ·  May 11, 2022 19:21

The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But if you buy shares in a really great company, you can more than double your money. To wit, the OCI International Holdings Limited (HKG:329) share price has flown 174% in the last three years. How nice for those who held the stock! On top of that, the share price is up 11% in about a quarter. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report.

While the stock has fallen 6.6% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

Check out our latest analysis for OCI International Holdings

OCI International Holdings wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over the last three years OCI International Holdings has grown its revenue at 3.1% annually. That's not a very high growth rate considering it doesn't make profits. In comparison, the share price rise of 40% per year over the last three years is pretty impressive. We'd need to take a closer look at the revenue and profit trends to see whether the improvements might justify that sort of increase. It seems likely that the market is pretty optimistic about OCI International Holdings, given it is losing money.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

SEHK:329 Earnings and Revenue Growth May 11th 2022

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. This free interactive report on OCI International Holdings' earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that OCI International Holdings has rewarded shareholders with a total shareholder return of 18% in the last twelve months. However, the TSR over five years, coming in at 22% per year, is even more impressive. Investors who like to make money usually check up on insider purchases, such as the price paid, and total amount bought. You can find out about the insider purchases of OCI International Holdings by clicking this link.

OCI International Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on HK exchanges.

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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.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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