Should Icicle Group Holdings (HKG:8429) Be Disappointed With Their 16% Profit?

Simply Wall St

If you want to compound wealth in the stock market, you can do so by buying an index fund. But you can significantly boost your returns by picking above-average stocks. To wit, the Icicle Group Holdings Limited (HKG:8429) share price is 16% higher than it was a year ago, much better than the market return of around -5.8% (not including dividends) in the same period. If it can keep that out-performance up over the long term, investors will do very well! Note that businesses generally develop over the long term, so the returns over the last year might not reflect a long term trend.

View our latest analysis for Icicle Group Holdings

While Icicle Group Holdings made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.

Icicle Group Holdings actually shrunk its revenue over the last year, with a reduction of 7.7%. Despite the lack of revenue growth, the stock has returned a solid 16% the last twelve months. We can correlate the share price rise with revenue or profit growth, but it seems the market had previously expected weaker results, and sentiment around the stock is improving.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

SEHK:8429 Income Statement, October 10th 2019

If you are thinking of buying or selling Icicle Group Holdings stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Icicle Group Holdings boasts a total shareholder return of 16% for the last year (that includes the dividends) . That's better than the more recent three month gain of 1.4%, implying that share price has plateaued recently. Having said that, we doubt shareholders would be concerned. It seems the market is simply waiting on more information, because if the business delivers so will the share price (eventually). You might want to assess this data-rich visualization of its earnings, revenue and cash flow.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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