The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But in contrast you can make much more than 100% if the company does well. For instance the Genetic Signatures Limited (ASX:GSS) share price is 104% higher than it was three years ago. That sort of return is as solid as granite. On the other hand, we note it's down 10.0% in about a month. This could be related to the soft market, with stocks down around 1.1% in the last month.
Genetic Signatures isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Over the last three years Genetic Signatures has grown its revenue at 25% annually. That's well above most pre-profit companies. Meanwhile, the share price performance has been pretty solid at 27% compound over three years. This suggests the market has recognized the progress the business has made, at least to a significant degree. That's not to say we think the share price is too high. In fact, it might be worth keeping an eye on this one.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
Take a more thorough look at Genetic Signatures's financial health with this free report on its balance sheet.
A Different Perspective
It's nice to see that Genetic Signatures shareholders have gained 76% (in total) over the last year. That gain actually surpasses the 27% TSR it generated (per year) over three years. The improving returns to shareholders suggests the stock is becoming more popular with time. Before spending more time on Genetic Signatures it might be wise to click here to see if insiders have been buying or selling shares.
We will like Genetic Signatures better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.