SunOpta's (TSE:SOY) Wonderful 534% Share Price Increase Shows How Capitalism Can Build Wealth

Simply Wall St
·3 min read

For many, the main point of investing in the stock market is to achieve spectacular returns. When an investor finds a multi-bagger (a stock that goes up over 200%), it makes a big difference to their portfolio. For example, the SunOpta Inc. (TSE:SOY) share price is up a whopping 534% in the last year, a handsome return in a single year. On top of that, the share price is up 62% in about a quarter. Looking back further, the stock price is 113% higher than it was three years ago.

Anyone who held for that rewarding ride would probably be keen to talk about it.

See our latest analysis for SunOpta

Given that SunOpta didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. 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 year SunOpta saw its revenue grow by 3.5%. That's not a very high growth rate considering it doesn't make profits. So it's truly surprising that the share price rocketed 534% in a single year. It's great to see that some have made big profits, but we aren't so sure that the increase is justified. It just goes to show that big money can be made if you buy the right stock early.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

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

This free interactive report on SunOpta's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that SunOpta has rewarded shareholders with a total shareholder return of 534% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 22% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand SunOpta better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with SunOpta .

We will like SunOpta better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, 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.

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. 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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