Yahoo Finance If You Had Bought Minco Capital (CVE:MMM) Stock Five Years Ago, You'd Be Sitting On A 67% Loss, Today
Generally speaking long term investing is the way to go. But along the way some stocks are going to perform badly. Zooming in on an example, the Minco Capital Corp. (CVE:MMM) share price dropped 67% in the last half decade. That's not a lot of fun for true believers. The silver lining is that the stock is up 9.1% in about a week.
Check out our latest analysis for Minco Capital
Minco Capital recorded just CA$587,975 in revenue over the last twelve months, which isn't really enough for us to consider it to have a proven product. You have to wonder why venture capitalists aren't funding it. 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 Minco Capital will significantly advance the business plan before too long.
As a general rule, if a company doesn't have much revenue, and it loses money, then it is a high risk investment. 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 such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt. It certainly is a dangerous place to invest, as Minco Capital investors might realise.
Minco Capital has plenty of cash in the bank, with cash in excess of all liabilities sitting at CA$13m, when it last reported (September 2019). This gives management the flexibility to drive business growth, without worrying too much about cash reserves. But since the share price has dropped 20% per year, over 5 years , it seems like the market might have been over-excited previously. You can click on the image below to see (in greater detail) how Minco Capital's cash levels have changed over time. You can click on the image below to see (in greater detail) how Minco Capital's cash levels have changed over time.
Of course, the truth is that it is hard to value companies without much revenue or profit. What if insiders are ditching the stock hand over fist? 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
It's nice to see that Minco Capital shareholders have received a total shareholder return of 41% over the last year. There's no doubt those recent returns are much better than the TSR loss of 20% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.
We will like Minco Capital 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.
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.
