Yahoo Finance Did The Underlying Business Drive Touchstone Exploration's (TSE:TXP) Lovely 534% Share Price Gain?
The last three months have been tough on Touchstone Exploration Inc. (TSE:TXP) shareholders, who have seen the share price decline a rather worrying 39%. But over the last three years the stock has shone bright like a diamond. The longer term view reveals that the share price is up 534% in that period. So the recent fall doesn't do much to dampen our respect for the business. Only time will tell if there is still too much optimism currently reflected in the share price.
We love happy stories like this one. The company should be really proud of that performance!
View our latest analysis for Touchstone Exploration
Because Touchstone Exploration 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. 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 3 years Touchstone Exploration saw its revenue shrink by 14% per year. This is in stark contrast to the strong share price growth of 85%, compound, per year. This clear lack of correlation between revenue and share price is surprising to see in a money losing company. At the risk of upsetting holders, this does suggest that hope for a better future is playing a significant role in the share price action.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
Take a more thorough look at Touchstone Exploration's financial health with this free report on its balance sheet.
A Different Perspective
We're pleased to report that Touchstone Exploration shareholders have received a total shareholder return of 60% over one year. That's better than the annualised return of 43% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. Take risks, for example - Touchstone Exploration has 4 warning signs we think you should be aware of.
But note: Touchstone Exploration 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 CA exchanges.
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. 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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