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If You Had Bought Arcoma (STO:ARCOMA) Shares Three Years Ago You'd Have Made 439%

Simply Wall St

We think that it's fair to say that the possibility of finding fantastic multi-year winners is what motivates many investors. Not every pick can be a winner, but when you pick the right stock, you can win big. One such superstar is Arcoma AB (STO:ARCOMA), which saw its share price soar 439% in three years. In more good news, the share price has risen 1.9% in thirty days.

See our latest analysis for Arcoma

While Arcoma 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. It would be hard to believe in a more profitable future without growing revenues.

In the last 3 years Arcoma saw its revenue grow at 6.9% per year. Considering the company is losing money, we think that rate of revenue growth is uninspiring. Therefore, we're a little surprised to see the share price gain has been so strong, at 75% per year, compound, over three years. A win is a win, even if the revenue growth doesn't really explain it, in our view). The company will need to continue to execute on its business strategy to justify this rise.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

OM:ARCOMA Income Statement, October 5th 2019

We know that Arcoma has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at Arcoma's financial health with this free report on its balance sheet.

A Different Perspective

We're pleased to report that Arcoma rewarded shareholders with a total shareholder return of 44% over the last year. That falls short of the 75% it has made, for shareholders, each year, over three years. 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 SE 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 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. Thank you for reading.