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Did Site Group International's (ASX:SIT) Share Price Deserve to Gain 100%?

Simply Wall St

If you want to compound wealth in the stock market, you can do so by buying an index fund. But investors can boost returns by picking market-beating companies to own shares in. For example, the Site Group International Limited (ASX:SIT) share price is up 100% in the last year, clearly besting the market return of around 18% (not including dividends). So that should have shareholders smiling. Zooming out, the stock is actually down 59% in the last three years.

Check out our latest analysis for Site Group International

Given that Site Group International 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last year Site Group International saw its revenue grow by 2.0%. That's not a very high growth rate considering it doesn't make profits. In keeping with the revenue growth, the share price gained 100% in that time. While not a huge gain tht seems pretty reasonable. It could be worth keeping an eye on this one, especially if growth accelerates.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

ASX:SIT Income Statement, November 26th 2019

Take a more thorough look at Site Group International's financial health with this free report on its balance sheet.

A Different Perspective

We're pleased to report that Site Group International shareholders have received a total shareholder return of 100% over one year. That certainly beats the loss of about 17% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.