Asia Energy Logistics Group (HKG:351) rallies 14% this week, taking one-year gains to 183%

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! Take, for example Asia Energy Logistics Group Limited (HKG:351). Its share price is already up an impressive 183% in the last twelve months. Better yet, the share price has risen 14% in the last week. Looking back further, the stock price is 57% higher than it was three years ago.

Since the stock has added HK$80m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

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Asia Energy Logistics Group wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually desire strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

In the last year Asia Energy Logistics Group saw its revenue shrink by 14%. We're a little surprised to see the share price pop 183% in the last year. This is a good example of how buyers can push up prices even before the fundamental metrics show much growth. It's quite likely the revenue fall was already priced in, anyway.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

If you are thinking of buying or selling Asia Energy Logistics Group stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We're pleased to report that Asia Energy Logistics Group shareholders have received a total shareholder return of 183% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 0.6% 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. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we've discovered 2 warning signs for Asia Energy Logistics Group (1 doesn't sit too well with us!) that you should be aware of before investing here.

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

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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.