Yahoo Finance Investors Who Bought Flexsteel Industries (NASDAQ:FLXS) Shares A Year Ago Are Now Up 326%
While stock picking isn't easy, for those willing to persist and learn, it is possible to buy shares in great companies, and generate wonderful returns. When you buy and hold the right company, the returns can make a huge difference to both you and your family. For example, the Flexsteel Industries, Inc. (NASDAQ:FLXS) share price is up a whopping 326% in the last year, a handsome return in a single year. On the other hand, the stock price has retraced 5.1% in the last week. In contrast, the longer term returns are negative, since the share price is 1.4% lower than it was three years ago.
See our latest analysis for Flexsteel Industries
Given that Flexsteel Industries 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. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.
Flexsteel Industries actually shrunk its revenue over the last year, with a reduction of 6.5%. This is in stark contrast to the splendorous stock price, which has rocketed 326% since this time a year ago. There can be no doubt this kind of decoupling of revenue growth and share price growth is unusual to see in loss making companies. While this gain looks like speculative buying to us, sometimes speculation pays off.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. It might be well worthwhile taking a look at our free report on Flexsteel Industries' earnings, revenue and cash flow.
What About Dividends?
When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Flexsteel Industries, it has a TSR of 332% for the last year. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
We're pleased to report that Flexsteel Industries shareholders have received a total shareholder return of 332% over one year. And that does include the dividend. That gain is better than the annual TSR over five years, which is 0.1%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For example, we've discovered 2 warning signs for Flexsteel Industries (1 is a bit concerning!) that you should be aware of before investing here.
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 US 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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