Advertisement
UK markets close in 4 hours 47 minutes
  • FTSE 100

    7,952.37
    +20.39 (+0.26%)
     
  • FTSE 250

    19,862.88
    +52.22 (+0.26%)
     
  • AIM

    743.40
    +1.29 (+0.17%)
     
  • GBP/EUR

    1.1695
    +0.0026 (+0.22%)
     
  • GBP/USD

    1.2620
    -0.0018 (-0.14%)
     
  • Bitcoin GBP

    55,930.52
    +217.00 (+0.39%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • S&P 500

    5,248.49
    +44.91 (+0.86%)
     
  • DOW

    39,760.08
    +477.75 (+1.22%)
     
  • CRUDE OIL

    82.55
    +1.20 (+1.48%)
     
  • GOLD FUTURES

    2,232.10
    +19.40 (+0.88%)
     
  • NIKKEI 225

    40,168.07
    -594.66 (-1.46%)
     
  • HANG SENG

    16,541.42
    +148.58 (+0.91%)
     
  • DAX

    18,490.85
    +13.76 (+0.07%)
     
  • CAC 40

    8,233.07
    +28.26 (+0.34%)
     

Vicinity Motor (CVE:VMC) shareholder returns have been solid, earning 104% in 3 years

It might seem bad, but the worst that can happen when you buy a stock (without leverage) is that its share price goes to zero. But when you pick a company that is really flourishing, you can make more than 100%. For instance the Vicinity Motor Corp. (CVE:VMC) share price is 104% higher than it was three years ago. That sort of return is as solid as granite. And in the last week the share price has popped 23%.

After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.

Check out our latest analysis for Vicinity Motor

Given that Vicinity Motor 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. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

ADVERTISEMENT

In the last 3 years Vicinity Motor saw its revenue shrink by 12% per year. So the share price gain of 27% per year is quite surprising. It's a good reminder that expectations about the future, not the past history, always impact share prices.

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

It's probably worth noting we've seen significant insider buying in the last quarter, which we consider a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. If you are thinking of buying or selling Vicinity Motor stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

While the broader market gained around 21% in the last year, Vicinity Motor shareholders lost 54%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 4% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. 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. Take risks, for example - Vicinity Motor has 3 warning signs (and 1 which is a bit concerning) we think you should know about.

There are plenty of other companies that have insiders buying up shares. You probably do 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 CA exchanges.

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

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.