Yahoo Finance Did You Participate In Any Of Bionomics' (ASX:BNO) Incredible 680% Return?
Bionomics Limited (ASX:BNO) shareholders might be concerned after seeing the share price drop 15% in the last week. But that isn't a problem when you consider how the share price has soared over the last year. In fact, it is up 579% in that time. So it is not that surprising to see the stock retrace a little. Of course, winners often do keep winning, so there may be more gains to come (if the business fundamentals stack up).
It really delights us to see such great share price performance for investors.
See our latest analysis for Bionomics
With just AU$2,194,059 worth of revenue in twelve months, we don't think the market considers Bionomics to have proven its business plan. 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 Bionomics has the funding to invent a new product before too long.
We think companies that have neither significant revenues nor profits are pretty high risk. We can see that they needed to raise more capital, and took that step recently despite the fact that it would have been dilutive 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. Some Bionomics investors have already had a taste of the sweet taste stocks like this can leave in the mouth, as they gain popularity and attract speculative capital.
Our data indicates that Bionomics had more in total liabilities than it had cash, when it last reported. That put it in the highest risk category, according to our analysis. So the fact that the stock is up 39% in the last year shows that the cash injection was a welcome one. Investors must really like its potential. You can click on the image below to see (in greater detail) how Bionomics' cash levels have changed over time.
In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. However you can take a look at whether insiders have been buying up shares. It's usually a positive if they have, as it may indicate they see value in the stock. Luckily we are in a position to provide you with this free chart of insider buying (and selling).
What about the Total Shareholder Return (TSR)?
Investors should note that there's a difference between Bionomics' total shareholder return (TSR) and its share price change, which we've covered above. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Bionomics hasn't been paying dividends, but its TSR of 680% exceeds its share price return of 579%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.
A Different Perspective
It's nice to see that Bionomics shareholders have received a total shareholder return of 680% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 1.0% 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. It's always interesting to track share price performance over the longer term. But to understand Bionomics better, we need to consider many other factors. Take risks, for example - Bionomics has 5 warning signs (and 3 which can't be ignored) we think you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
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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