Yahoo Finance Did Business Growth Power 01 Communique Laboratory's (CVE:ONE) Share Price Gain of 136%?
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 01 Communique Laboratory Inc. (CVE:ONE) share price is 136% higher than it was three years ago. Most would be happy with that. It's also good to see the share price up 30% over the last quarter.
See our latest analysis for 01 Communique Laboratory
We don't think 01 Communique Laboratory's revenue of CA$251,150 is enough to establish significant demand. As a result, we think it's unlikely shareholders are paying much attention to current revenue, but rather speculating on growth in the years to come. Investors will be hoping that 01 Communique Laboratory can make progress and gain better traction for the business, before it runs low on cash.
As a general rule, if a company doesn't have much revenue, and it loses money, then it is a high risk investment. You should be aware that there is always a chance that this sort of company will need to issue more shares to raise money to continue pursuing its business plan. While some companies like this go on to deliver on their plan, making good money for shareholders, many end in painful losses and eventual de-listing. 01 Communique Laboratory has already given some investors a taste of the sweet gains that high risk investing can generate, if your timing is right.
Our data indicates that 01 Communique Laboratory had CA$223k more in total liabilities than it had cash, when it last reported in July 2019. That makes it extremely high risk, in our view. So the fact that the stock is up 88% per year, over 3 years shows that high risks can lead to high rewards, sometimes. Investors must really like its potential. The image below shows how 01 Communique Laboratory's balance sheet has changed over time; if you want to see the precise values, simply click on the image. You can click on the image below to see (in greater detail) how 01 Communique Laboratory's cash levels have changed over time.
Of course, the truth is that it is hard to value companies without much revenue or profit. However you can take a look at whether insiders have been buying up shares. It's often positive if so, assuming the buying is sustained and meaningful. Luckily we are in a position to provide you with this free chart of insider buying (and selling).
A Different Perspective
It's good to see that 01 Communique Laboratory has rewarded shareholders with a total shareholder return of 86% in the last twelve months. Notably the five-year annualised TSR loss of 12% per year compares very unfavourably with the recent share price performance. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand 01 Communique Laboratory better, we need to consider many other factors. Case in point: We've spotted 6 warning signs for 01 Communique Laboratory you should be aware of, and 3 of them don't sit too well with us.
If you are like me, then you will 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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.
