Hong Seng Consolidated Berhad (KLSE:HONGSENG) delivers shareholders stellar 39% CAGR over 3 years, surging 12% in the last week alone

It hasn't been the best quarter for Hong Seng Consolidated Berhad (KLSE:HONGSENG) shareholders, since the share price has fallen 30% in that time. In contrast, the return over three years has been impressive. The share price marched upwards over that time, and is now 171% higher than it was. To some, the recent share price pullback wouldn't be surprising after such a good run. If the business can perform well for years to come, then the recent drop could be an opportunity.

The past week has proven to be lucrative for Hong Seng Consolidated Berhad investors, so let's see if fundamentals drove the company's three-year performance.

View our latest analysis for Hong Seng Consolidated Berhad

Hong Seng Consolidated Berhad 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. 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 3 years Hong Seng Consolidated Berhad saw its revenue grow at 51% per year. That's much better than most loss-making companies. Meanwhile, the share price performance has been pretty solid at 39% compound over three years. But it does seem like the market is paying attention to strong revenue growth. Nonetheless, we'd say Hong Seng Consolidated Berhad is still worth investigating - successful businesses can often keep growing for long periods.

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

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

Hong Seng Consolidated Berhad shareholders are down 83% for the year, but the market itself is up 7.1%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 11%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Hong Seng Consolidated Berhad better, we need to consider many other factors. Take risks, for example - Hong Seng Consolidated Berhad has 2 warning signs we think you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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

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