Yahoo Finance If You Had Bought Globex Mining Enterprises (TSE:GMX) Stock Five Years Ago, You Could Pocket A 59% Gain Today
Globex Mining Enterprises Inc. (TSE:GMX) shareholders might be concerned after seeing the share price drop 10% in the last week. On the bright side the returns have been quite good over the last half decade. After all, the share price is up a market-beating 59% in that time. While the returns over the last 5 years have been good, we do feel sorry for those shareholders who haven't held shares that long, because the share price is down 34% in the last three years.
View our latest analysis for Globex Mining Enterprises
We don't think Globex Mining Enterprises's revenue of CA$2,644,445 is enough to establish significant demand. So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). For example, investors may be hoping that Globex Mining Enterprises finds some valuable resources, before it runs out of money.
Companies that lack both meaningful revenue and profits are usually considered high risk. 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. Some Globex Mining Enterprises 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.
When it last reported its balance sheet in September 2019, Globex Mining Enterprises had cash in excess of all liabilities of CA$2.0m. That's not too bad but management may have to think about raising capital or taking on debt, unless the company is close to breaking even. With the share price up 119% per year, over 5 years , the market is seems hopeful about the potential, despite the cash burn. You can see in the image below, how Globex Mining Enterprises's cash levels have changed over time (click to see the values). You can click on the image below to see (in greater detail) how Globex Mining Enterprises's cash levels have changed over time.
It can be extremely risky to invest in a company that doesn't even have revenue. There's no way to know its value easily. Given that situation, many of the best investors like to check if insiders have been buying shares. If they are buying a significant amount of shares, that's certainly a good thing. Luckily we are in a position to provide you with this free chart of insider buying (and selling).
A Different Perspective
We're pleased to report that Globex Mining Enterprises shareholders have received a total shareholder return of 7.7% over one year. However, the TSR over five years, coming in at 9.7% per year, is even more impressive. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 5 warning signs for Globex Mining Enterprises (of which 1 is a bit concerning!) you should know about.
We will like Globex Mining Enterprises 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.
