Navigator Holdings' (NYSE:NVGS) investors will be pleased with their favorable 33% return over the last year
If you want to compound wealth in the stock market, you can do so by buying an index fund. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). To wit, the Navigator Holdings Ltd. (NYSE:NVGS) share price is 33% higher than it was a year ago, much better than the market decline of around 23% (not including dividends) in the same period. So that should have shareholders smiling. Zooming out, the stock is actually down 13% in the last three years.
So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.
View our latest analysis for Navigator Holdings
Given that Navigator Holdings only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. 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.
Navigator Holdings grew its revenue by 34% last year. We respect that sort of growth, no doubt. Buyers pushed the share price 33% in response, which isn't unreasonable. If revenue stays on trend, there may be plenty more share price gains to come. But it's crucial to check profitability and cash flow before forming a view on the future.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
We know that Navigator Holdings has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at Navigator Holdings' financial health with this free report on its balance sheet.
A Different Perspective
It's good to see that Navigator Holdings has rewarded shareholders with a total shareholder return of 33% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 1.9% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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. Even so, be aware that Navigator Holdings is showing 3 warning signs in our investment analysis , and 1 of those can't be ignored...
But note: Navigator Holdings may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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