Unless you borrow money to invest, the potential losses are limited. But when you pick a company that is really flourishing, you can make more than 100%. Take, for example Catapult Group International Ltd (ASX:CAT). Its share price is already up an impressive 189% in the last twelve months. Also pleasing for shareholders was the 33% gain in the last three months. It is also impressive that the stock is up 60% over three years, adding to the sense that it is a real winner.
Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.
Check out our latest analysis for Catapult Group International
Catapult Group International isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.
Over the last twelve months, Catapult Group International's revenue grew by 19%. We respect that sort of growth, no doubt. The revenue growth is decent but the share price had an even better year, gaining 189%. Given that the business has made good progress on the top line, it would be worth taking a look at its path to profitability. Of course, we are always cautious about succumbing to 'fear of missing out' when a stock has shot up strongly.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
If you are thinking of buying or selling Catapult Group International stock, you should check out this FREE detailed report on its balance sheet.
It's good to see that Catapult Group International has rewarded shareholders with a total shareholder return of 189% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 11% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. Even so, be aware that Catapult Group International is showing 3 warning signs in our investment analysis , you should know about...