Yahoo Finance The IMV (TSE:IMV) Share Price Is Down 56% So Some Shareholders Are Wishing They Sold
Investing in stocks comes with the risk that the share price will fall. And there's no doubt that IMV Inc. (TSE:IMV) stock has had a really bad year. To wit the share price is down 56% in that time. On the bright side, the stock is actually up 35% in the last three years. On top of that, the share price has dropped a further 11% in a month.
View our latest analysis for IMV
We don't think IMV's revenue of CA$51,000 is enough to establish significant demand. 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. For example, they may be hoping that IMV comes up with a great new product, before it runs out of money.
We think companies that have neither significant revenues nor profits are pretty high risk. There is usually a significant chance that they will need more money for business development, putting them at the mercy of capital markets. So the share price itself impacts the value of the shares (as it determines the cost of capital). 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 IMV investors have already had a taste of the bitterness stocks like this can leave in the mouth.
IMV had cash in excess of all liabilities of just CA$11m when it last reported (June 2019). So if it has not already moved to replenish reserves, we think the near-term chances of a capital raising event are pretty high. With that in mind, you can understand why the share price dropped 56% in the last year . You can click on the image below to see (in greater detail) how IMV's cash levels have changed over time. You can click on the image below to see (in greater detail) how IMV's cash levels have changed over time.
In reality it's hard to have much certainty when valuing a business that has neither 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. It only takes a moment for you to check whether we have identified any insider sales recently.
A Different Perspective
While the broader market gained around 8.0% in the last year, IMV shareholders lost 56%. 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. Longer term investors wouldn't be so upset, since they would have made 6.5%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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.
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.
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