Investors in Oceanus Group (SGX: 579) will be delighted with their excellent return of 200% over the past three years

Whereas Oceanus Group Limited (SGX: 579) shareholders are likely generally happy, the stock hasn’t done particularly well recently, with the stock price falling 29% in the last quarter. On the other hand, the three-year return is impressive. Indeed, the share price is up 200% very sharply during this period. For some, the recent decline in the share price would not be surprising after such a good run. Fundamental trading performance will ultimately dictate whether the top is in place or if this is a great buying opportunity.

So let’s assess the underlying fundamentals over the past 3 years and see if they have moved in step with shareholder returns.

Discover our latest analysis for Oceanus Group

Since Oceanus Group has made only minimal profits in the past twelve months, we will focus on revenue to assess its business development. Generally speaking, we would consider a stock like this alongside loss-making companies, simply because the amount of profit is so small. For shareholders to have confidence that a company will increase its profits significantly, it must increase its revenue.

Oceanus Group revenue grew 86% annually over three years. That’s way above most nonprofits. Along the way, the stock price has gained 44% annually, a solid pop by our standards. This suggests that the market has recognized the progress made by the company, at least to a significant extent. Nonetheless, we’d say Oceanus Group is still worth investigating – successful businesses can often continue to grow for long periods of time.

The image below shows how earnings and income have tracked over time (if you click on the image you can see more details).

earnings-and-revenue-growth

Take a closer look at the financial health of the Oceanus Group with this free report on its balance sheet.

A different perspective

We regret to report that Oceanus Group shareholders are down 69% for the year. Unfortunately, this is worse than the general market decline of 3.7%. That said, it is inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer-term investors wouldn’t be so upset, as they would have gained 6%, every year, over five years. If fundamentals continue to point to sustainable long-term growth, the current sell-off could be an opportunity to consider. I find it very interesting to look at stock price over the long term as a proxy for company performance. But to really get insight, we also need to consider other information. Example: we have identified 5 warning signs for Oceanus Group you should be aware of, and 2 of them should not be ignored.

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

Please note that the market returns quoted in this article reflect the market-weighted average returns of the stocks currently trading on the SG Exchanges.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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Robert D. Coleman