Yahoo Finance If You Had Bought Hornby Bay Mineral Exploration (CVE:HBE) Stock Five Years Ago, You'd Be Sitting On A 64% Loss, Today
Statistically speaking, long term investing is a profitable endeavour. But no-one is immune from buying too high. To wit, the Hornby Bay Mineral Exploration Ltd. (CVE:HBE) share price managed to fall 64% over five long years. That is extremely sub-optimal, to say the least. And it's not just long term holders hurting, because the stock is down 50% in the last year.
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See our latest analysis for Hornby Bay Mineral Exploration
Hornby Bay Mineral Exploration recorded just CA$30,000 in revenue over the last twelve months, which isn't really enough for us to consider it to have a proven product. 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. For example, investors may be hoping that Hornby Bay Mineral Exploration finds some valuable resources, before it runs out of money.
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. Some Hornby Bay Mineral Exploration investors have already had a taste of the bitterness stocks like this can leave in the mouth.
Hornby Bay Mineral Exploration had liabilities exceeding cash by CA$1,761,388 when it last reported in December 2018, according to our data. That makes it extremely high risk, in our view. But with the share price diving 19% per year, over 5 years, it's probably fair to say that some shareholders no longer believe the company will succeed. You can click on the image below to see (in greater detail) how Hornby Bay Mineral Exploration'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. Would it bother you if insiders were selling the stock? I would feel more nervous about the company if that were so. You can click here to see if there are insiders selling.
A Different Perspective
Hornby Bay Mineral Exploration shareholders are down 50% for the year, but the market itself is up 2.1%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 19% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. Before forming an opinion on Hornby Bay Mineral Exploration you might want to consider these 3 valuation metrics.
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 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.
