Passive investing in index funds can generate returns that roughly match the overall market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). For example, the Efecte Oy (HEL:EFECTE) share price is up 11% in the last year, clearly besting the market return of around 6.2% (not including dividends). That's a solid performance by our standards! We'll need to follow Efecte Oy for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.
Given that Efecte Oy 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. 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.
In the last year Efecte Oy saw its revenue grow by 14%. 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 11%. 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.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
This free interactive report on Efecte Oy's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
In the last year the market returned about 11%, and Efecte Oy generated a TSR of 11% for its shareholders. And the stock has been on a nice little run lately, with the price climbing 7.5% higher in 90 days. It could be that word is spreading about its positive business attributes. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.
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 FI 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.