While some are satisfied with an index fund, active investors aim to find truly magnificent investments on the stock market. When you find (and hold) a big winner, you can markedly improve your finances. For example, the Carver Bancorp, Inc. (NASDAQ:CARV) share price is up a whopping 675% in the last year, a handsome return in a single year. In more good news, the share price has risen 67% in thirty days. And shareholders have also done well over the long term, with an increase of 191% in the last three years.
Anyone who held for that rewarding ride would probably be keen to talk about it.
Given that Carver Bancorp didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. 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.
Carver Bancorp grew its revenue by 4.7% last year. That's not a very high growth rate considering it doesn't make profits. So it's truly surprising that the share price rocketed 675% in a single year. It's great to see that some have made big profits, but we aren't so sure that the increase is justified. It just goes to show that big money can be made if you buy the right stock early.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
This free interactive report on Carver Bancorp's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
It's nice to see that Carver Bancorp shareholders have received a total shareholder return of 675% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 33% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 3 warning signs for Carver Bancorp you should be aware of, and 1 of them is a bit unpleasant.
Of course Carver Bancorp 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 US exchanges.
This article by Simply Wall St is general in nature. 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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