Yahoo Finance Investors Who Bought Renaissance Oil (CVE:ROE) Shares A Year Ago Are Now Up 791%
While stock picking isn't easy, for those willing to persist and learn, it is possible to buy shares in great companies, and generate wonderful returns. When you find (and hold) a big winner, you can markedly improve your finances. In the case of Renaissance Oil Corp. (CVE:ROE), the share price is up an incredible 791% in the last year alone. On top of that, the share price is up 42% in about a quarter. And shareholders have also done well over the long term, with an increase of 113% in the last three years.
We love happy stories like this one. The company should be really proud of that performance!
See our latest analysis for Renaissance Oil
Renaissance Oil recorded just CA$3,015,449 in revenue over the last twelve months, which isn't really enough for us to consider it to have a proven product. 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 Renaissance Oil finds fossil fuels with an exploration program, before it runs out of money.
As a general rule, if a company doesn't have much revenue, and it loses money, then it is a high risk investment. There is usually a significant chance that they will need more money for business development, putting them at the mercy of capital markets to raise equity. 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. Of course, if you time it right, high risk investments like this can really pay off, as Renaissance Oil investors might know.
Renaissance Oil had liabilities exceeding cash by CA$19m when it last reported in March 2021, according to our data. That puts it in the highest risk category, according to our analysis. So we're surprised to see the stock up 32% in the last year , but we're happy for holders. Investors must really like its potential. You can click on the image below to see (in greater detail) how Renaissance Oil's cash levels have changed over time.
Of course, the truth is that it is hard to value companies without much revenue or profit. Given that situation, many of the best investors like to check if insiders have been buying shares. It's usually a positive if they have, as it may indicate they see value in the stock. You can click here to see if there are insiders buying.
A Different Perspective
It's nice to see that Renaissance Oil shareholders have received a total shareholder return of 791% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 15% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Renaissance Oil better, we need to consider many other factors. To that end, you should learn about the 5 warning signs we've spotted with Renaissance Oil (including 1 which makes us a bit uncomfortable) .
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can 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.
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. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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