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Does Maverix Metals's (CVE:MMX) Share Price Gain of 63% Match Its Business Performance?

Simply Wall St

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These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But if you pick the right individual stocks, you could make more than that. To wit, the Maverix Metals Inc. (CVE:MMX) share price is 63% higher than it was a year ago, much better than the market return of around 1.1% (not including dividends) in the same period. That's a solid performance by our standards! We'll need to follow Maverix Metals for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

View our latest analysis for Maverix Metals

We don't think that Maverix Metals's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.

Over the last twelve months, Maverix Metals's revenue grew by 74%. That's a head and shoulders above most loss-making companies. While the share price gain of 63% over twelve months is pretty tasty, you might argue it doesn't fully reflect the strong revenue growth. So quite frankly it could be a good time to investigate Maverix Metals in some detail. Human beings have trouble conceptualizing (and valuing) exponential growth. Is that what we're seeing here?

The graphic below shows how revenue and earnings have changed as management guided the business forward. If you want to see cashflow, you can click on the chart.

TSXV:MMX Income Statement, May 3rd 2019

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. So it makes a lot of sense to check out what analysts think Maverix Metals will earn in the future (free profit forecasts).

A Different Perspective

Maverix Metals boasts a total shareholder return of 63% for the last year. The more recent returns haven't been as impressive as the longer term returns, coming in at just 8.7%. It seems likely the market is waiting on fundamental developments with the business before pushing the share price higher (or lower). It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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

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.

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. Thank you for reading.