These days, it’s easy to just buy an index fund, and your returns should (roughly) match the market. But you can dramatically increase your returns by choosing above-average stocks. For example, the Genting Malaysia Berhad The share price (KLSE: GENM) has risen 49% over the past year, clearly outpacing the market return by around 6.0% (excluding dividends). This should therefore make shareholders smile. On the other hand, longer-term shareholders have had a tougher race, with the stock falling 28% in three years.
After a strong gain last week, it’s worth seeing if long-term returns have been boosted by improving fundamentals.
Check out our latest review for Genting Malaysia Berhad
Given that Genting Malaysia Berhad has recorded a loss over the past twelve months, we believe the market is likely more focused on revenue and revenue growth, at least for now. Generally speaking, companies with no profits are expected to increase their income every year, and at a good rate. As you can imagine, rapid revenue growth, when sustained, often leads to rapid profit growth.
Over the past year, Genting Malaysia Berhad has seen its turnover decrease by 45%. The stock is up 49% during this period, a good performance given the drop in revenues. We can correlate the rise in the stock price with the growth in income or earnings, but it seems that the market was previously expecting weaker results, and sentiment around the stock is improving.
You can see how income and income have changed over time in the image below (click on the graph to see the exact values).
Genting Malaysia Berhad is a well-known stock, with plenty of analyst coverage, suggesting some visibility into future growth. You can see what analysts are predicting for Genting Malaysia Berhad in this interactive graph of future profit estimates.
What about the Total Shareholder Return (TSR)?
We would be remiss not to mention the difference between Genting Malaysia Berhad’s total shareholder return (TSR) and its share price return. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any impact or discounted capital increases offered to shareholders. Genting Malaysia Berhad’s TSR of 53% for year 1 exceeded its share price return because it paid dividends.
A different perspective
It is good to see that Genting Malaysia Berhad has rewarded its shareholders with a total shareholder return of 53% over the past twelve months. There is no doubt that these recent returns are much better than the TSR’s loss of 3% per annum over five years. It makes us a little suspicious, but the company may have changed course. While it is worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we discovered 1 warning sign for Genting Malaysia Berhad which you should know before investing here.
If you are like me then you not want to miss it free list of growing companies that insiders buy.
Please note that the market returns quoted in this article reflect the average market weighted returns of stocks currently trading on MY exchanges.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.
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