If you want to compound wealth in the stock market, you can do so by buying an index fund. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). To wit, the Hillgrove Resources Limited (ASX:HGO) share price is 100% higher than it was a year ago, much better than the market return of around 37% (not including dividends) in the same period. So that should have shareholders smiling. Zooming out, the stock is actually down 14% in the last three years.

Check out our latest analysis for Hillgrove Resources

Because Hillgrove Resources 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. When a company doesn't make profits, we'd generally expect to see good 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.

In the last year Hillgrove Resources saw its revenue shrink by 82%. Despite the lack of revenue growth, the stock has returned a solid 100% the last twelve months. We can correlate the share price rise with revenue or profit growth, but it seems the market had previously expected weaker results, and sentiment around the stock is improving.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

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. Dive deeper into the earnings by checking this interactive graph of Hillgrove Resources' earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We've already covered Hillgrove Resources' share price action, but we should also mention its total shareholder return (TSR). Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Dividends have been really beneficial for Hillgrove Resources shareholders, and that cash payout contributed to why its TSR of 104%, over the last year, is better than the share price return.

A Different Perspective

It's nice to see that Hillgrove Resources shareholders have received a total shareholder return of 104% over the last year. That's better than the annualised return of 18% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Hillgrove Resources better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Hillgrove Resources you should be aware of, and 2 of them are concerning.

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 AU 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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