Yahoo Finance Does Sandstorm Gold’s Share Price Gain of 70% Match Its Business Performance?
One simple way to benefit from the stock market is to buy an index fund. But if you choose individual stocks with prowess, you can make superior returns. Just take a look at Sandstorm Gold Ltd. (TSE:SSL), which is up 70%, over three years, soundly beating the market return of 17% (not including dividends). However, more recent returns haven’t been as impressive as that, with the stock returning just 23% in the last year.
View our latest analysis for Sandstorm Gold
We don’t think that Sandstorm Gold’s modest trailing twelve month profit has the market’s full attention at the moment. We think revenue is probably a better guide. As a general rule, if the market is looking past earnings to focus on revenue, there is a hope for, or expectation of, strong growth. The main reason for this is that fast revenue growth can be readily extrapolated into a profitable future, but stagnant revenue cannot.
Over the last three years Sandstorm Gold has grown its revenue at 12% annually. That’s a very respectable growth rate. The share price gain of 19% per year shows that the market is paying attention to this growth. Of course, valuation is quite sensitive to the rate of growth. Keep in mind that the strength of the balance sheet impacts the options open to the company.
The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).
We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. This free report showing analyst forecasts should help you form a view on Sandstorm Gold
A Different Perspective
It’s good to see that Sandstorm Gold has rewarded shareholders with a total shareholder return of 23% in the last twelve months. That certainly beats the loss of about 0.5% per year over the last half decade. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares – and the price they paid.
Sandstorm Gold is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA 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 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. Thank you for reading.
