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Is Chaarat Gold Holdings' (LON:CGH) 166% Share Price Increase Well Justified?

It hasn't been the best quarter for Chaarat Gold Holdings Limited (LON:CGH) shareholders, since the share price has fallen 22% in that time. But that doesn't change the fact that the returns over the last five years have been very strong. In fact, the share price is 166% higher today. To some, the recent pullback wouldn't be surprising after such a fast rise. The more important question is whether the stock is too cheap or too expensive today. While the long term returns are impressive, we do have some sympathy for those who bought more recently, given the 45% drop, in the last year.

View our latest analysis for Chaarat Gold Holdings

Because Chaarat Gold Holdings made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

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

Take a more thorough look at Chaarat Gold Holdings' financial health with this free report on its balance sheet.

A Different Perspective

While the broader market gained around 25% in the last year, Chaarat Gold Holdings shareholders lost 45%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 22% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Chaarat Gold Holdings better, we need to consider many other factors. For example, we've discovered 3 warning signs for Chaarat Gold Holdings that you should be aware of before investing here.

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If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.