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Did You Miss Kingsley Edugroup's (HKG:8105) 26% Share Price Gain?

Simply Wall St

These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But investors can boost returns by picking market-beating companies to own shares in. To wit, the Kingsley Edugroup Limited (HKG:8105) share price is 26% higher than it was a year ago, much better than the market return of around 6.4% (not including dividends) in the same period. So that should have shareholders smiling. We'll need to follow Kingsley Edugroup for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

Check out our latest analysis for Kingsley Edugroup

While Kingsley Edugroup made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

Over the last twelve months, Kingsley Edugroup's revenue grew by 11%. That's not a very high growth rate considering it doesn't make profits. The modest growth is probably largely reflected in the share price, which is up 26%. While not a huge gain tht seems pretty reasonable. Given the market doesn't seem too excited about the stock, a closer look at the financial data could pay off, if you can find indications of a stronger growth trend in the future.

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

SEHK:8105 Income Statement, January 16th 2020

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

Kingsley Edugroup shareholders should be happy with the total gain of 26% over the last twelve months. 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. Be aware that Kingsley Edugroup is showing 4 warning signs in our investment analysis , and 2 of those make us uncomfortable...

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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