Minesto AB (publ) (STO:MINEST) shareholders might be concerned after seeing the share price drop 18% in the last quarter. But that doesn’t change the fact that the returns over the last three years have been pleasing. To wit, the share price did better than an index fund, climbing 86% during that period.
Check out our latest analysis for Minesto
Given that Minesto 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Over the last three years Minesto has grown its revenue at 6.1% annually. That’s not a very high growth rate considering it doesn’t make profits. The modest growth is probably broadly reflected in the share price, which is up 23%, per year over 3 years. The real question is when the business will generate profits, and how quickly they will grow. In this sort of situation it can be worth putting the stock on your watchlist. If it can become profitable, then even moderate revenue growth could grow profits quickly.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
OM:MINEST Income Statement April 3rd 2020
Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.
What about the Total Shareholder Return (TSR)?
We’ve already covered Minesto’s share price action, but we should also mention its total shareholder return (TSR). The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Minesto hasn’t been paying dividends, but its TSR of 109% exceeds its share price return of 86%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.
A Different Perspective
It’s nice to see that Minesto shareholders have gained 18% (in total) over the last year. The TSR has been even better over three years, coming in at 28% per year. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we’ve identified 6 warning signs for Minesto (2 shouldn’t be ignored) that you should be aware of.
We will like Minesto 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 SE 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.
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