Gannett's (NYSE:GCI) investors will be pleased with their incredible 321% return over the last year

·2 min read

Active investing isn't easy, but for those that do it, the aim is to find the best companies to buy, and to profit handsomely. When you buy and hold the right company, the returns can make a huge difference to both you and your family. For example, the Gannett Co., Inc. (NYSE:GCI) share price rocketed moonwards 321% in just one year. It's also good to see the share price up 24% over the last quarter. Unfortunately the longer term returns are not so good, with the stock falling 62% in the last three years.

Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.

See our latest analysis for Gannett

Gannett isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. 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 year Gannett saw its revenue grow by 17%. That's a fairly respectable growth rate. But the market is even more excited about it, with the price apparently bound for the moon, up 321% in one of earth's orbits. While we are always careful about jumping on a hot stock too late, there's certainly good reason to keep an eye on Gannett.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

earnings-and-revenue-growth
earnings-and-revenue-growth

It's good to see that there was some significant insider buying in the last three months. That's a positive. On the other hand, we think the revenue and earnings trends are much more meaningful measures of the business. You can see what analysts are predicting for Gannett in this interactive graph of future profit estimates.

A Different Perspective

It's nice to see that Gannett shareholders have received a total shareholder return of 321% over the last year. There's no doubt those recent returns are much better than the TSR loss of 7% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. 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 example, we've discovered 1 warning sign for Gannett that you should be aware of before investing here.

Gannett 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 US exchanges.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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