Yahoo Finance Did You Manage To Avoid MedMira's (CVE:MIR) Painful 70% Share Price Drop?
Generally speaking long term investing is the way to go. But along the way some stocks are going to perform badly. Zooming in on an example, the MedMira Inc. (CVE:MIR) share price dropped 70% in the last half decade. That is extremely sub-optimal, to say the least. Even worse, it's down 40% in about a month, which isn't fun at all. Importantly, this could be a market reaction to the recently released financial results. You can check out the latest numbers in our company report.
Check out our latest analysis for MedMira
We don't think MedMira's revenue of CA$527,445 is enough to establish significant demand. We can't help wondering why it's publicly listed so early in its journey. Are venture capitalists not interested? So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. It seems likely some shareholders believe that MedMira will significantly advance the business plan before too long.
Companies that lack both meaningful revenue and profits are usually considered high risk. There is almost always a chance they will need to raise more capital, and their progress - and share price - will dictate how dilutive that is to current holders. While some such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt. MedMira has already given some investors a taste of the bitter losses that high risk investing can cause.
Our data indicates that MedMira had CA$14m more in total liabilities than it had cash, when it last reported in July 2019. That puts it in the highest risk category, according to our analysis. But since the share price has dived -21% per year, over 5 years , it looks like some investors think it's time to abandon ship, so to speak. You can click on the image below to see (in greater detail) how MedMira's cash levels have changed over time. You can see in the image below, how MedMira's cash levels have changed over time (click to see the values).
Of course, the truth is that it is hard to value companies without much revenue or profit. What if insiders are ditching the stock hand over fist? I'd like that just about as much as I like to drink milk and fruit juice mixed together. It costs nothing but a moment of your time to see if we are picking up on any insider selling.
A Different Perspective
It's nice to see that MedMira shareholders have received a total shareholder return of 50% over the last year. There's no doubt those recent returns are much better than the TSR loss of 21% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
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.
