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Introducing PEDEVCO (NYSEMKT:PED), A Stock That Climbed 74% In The Last Year

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The simplest way to invest in stocks is to buy exchange traded funds. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). To wit, the PEDEVCO Corp. (NYSEMKT:PED) share price is 74% higher than it was a year ago, much better than the market return of around 26% (not including dividends) in the same period. If it can keep that out-performance up over the long term, investors will do very well! It is also impressive that the stock is up 62% over three years, adding to the sense that it is a real winner.

View our latest analysis for PEDEVCO

Because PEDEVCO made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

PEDEVCO grew its revenue by 197% last year. That's stonking growth even when compared to other loss-making stocks. The solid 74% share price gain goes down pretty well, but it's not necessarily as good as you might expect given the top notch revenue growth. If that's the case, now might be the time to take a close look at PEDEVCO. Human beings have trouble conceptualizing (and valuing) exponential growth. Is that what we're seeing here?

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

AMEX:PED Income Statement, January 7th 2020
AMEX:PED Income Statement, January 7th 2020

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. It might be well worthwhile taking a look at our free report on PEDEVCO's earnings, revenue and cash flow.

A Different Perspective

We're pleased to report that PEDEVCO shareholders have received a total shareholder return of 74% over one year. Notably the five-year annualised TSR loss of 15% per year compares very unfavourably with the recent share price performance. This makes us a little wary, but the business might have turned around its fortunes. It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

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