Did You Miss S.A.L. Steel's (NSE:SALSTEEL) 65% Share Price Gain?

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While S.A.L. Steel Limited (NSE:SALSTEEL) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 23% in the last quarter. But over three years, the returns would have left most investors smiling After all, the share price is up a market-beating 65% in that time.

View our latest analysis for S.A.L. Steel

Because S.A.L. Steel is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last 3 years S.A.L. Steel saw its revenue grow at 24% per year. That's well above most pre-profit companies. The share price rise of 18% per year throughout that time is nice to see, and given the revenue growth, that gain seems somewhat justified. So now might be the perfect time to put S.A.L. Steel on your radar. If the company is trending towards profitability then it could be very interesting.

You can see how revenue and earnings have changed over time in the image below, (click on the chart to see cashflow).

NSEI:SALSTEEL Income Statement, June 19th 2019
NSEI:SALSTEEL Income Statement, June 19th 2019

Balance sheet strength is crucual. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

Investors in S.A.L. Steel had a tough year, with a total loss of 46%, against a market gain of about 0.2%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 0.5% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on IN 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.