Yahoo Finance The Good Life Networks (CVE:GOOD) Share Price Is Down 87% So Some Shareholders Are Rather Upset
Even the best investor on earth makes unsuccessful investments. But serious investors should think long and hard about avoiding extreme losses. So we hope that those who held Good Life Networks Inc. (CVE:GOOD) during the last year don't lose the lesson, in addition to the 87% hit to the value of their shares. That'd be a striking reminder about the importance of diversification. Because Good Life Networks hasn't been listed for many years, the market is still learning about how the business performs. Furthermore, it's down 77% in about a quarter. That's not much fun for holders. We note that the company has reported results fairly recently; and the market is hardly delighted. You can check out the latest numbers in our company report.
We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.
See our latest analysis for Good Life Networks
Because Good Life Networks is loss-making, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
Good Life Networks grew its revenue by 79% over the last year. That's a strong result which is better than most other loss making companies. So on the face of it we're really surprised to see the share price down 87% over twelve months. Something weird is definitely impacting the stock price; we'd venture the company has destroyed value somehow. We'd recommend taking a very close look at the stock (and any available forecasts), before considering a purchase, because the share price is not correlated with the revenue growth, that's for sure. Of course, investors do over-react when they are stressed out, so the sell-off could be unjustifiably severe.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
If you are thinking of buying or selling Good Life Networks stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Given that the market gained 13% in the last year, Good Life Networks shareholders might be miffed that they lost 87%. While the aim is to do better than that, it's worth recalling that even great long-term investments sometimes underperform for a year or more. With the stock down 77% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. You could get a better understanding of Good Life Networks's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
We will like Good Life Networks better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider 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.
