Yahoo Finance Investors Who Bought Troubadour Resources (CVE:TR) Shares A Year Ago Are Now Down 57%
Investing in stocks comes with the risk that the share price will fall. And there's no doubt that Troubadour Resources Inc. (CVE:TR) stock has had a really bad year. In that relatively short period, the share price has plunged 57%. Because Troubadour Resources hasn't been listed for many years, the market is still learning about how the business performs. Furthermore, it's down 43% in about a quarter. That's not much fun for holders.
View our latest analysis for Troubadour Resources
Troubadour Resources hasn't yet reported any revenue, so it's as much a business idea as an actual business. This state of affairs suggests that venture capitalists won't provide funds on attractive terms. As a result, we think it's unlikely shareholders are paying much attention to current revenue, but rather speculating on growth in the years to come. It seems likely some shareholders believe that Troubadour Resources will find or develop a valuable new mine 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. 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 companies like this go on to deliver on their plan, making good money for shareholders, many end in painful losses and eventual de-listing. Troubadour Resources has already given some investors a taste of the bitter losses that high risk investing can cause.
Troubadour Resources had cash in excess of all liabilities of just CA$388k when it last reported (March 2019). So if it hasn't remedied the situation already, it will almost certainly have to raise more capital soon. That probably explains why the share price is down 57% in the last year. You can see in the image below, how Troubadour Resources's cash levels have changed over time (click to see the values). You can see in the image below, how Troubadour Resources's cash levels have changed over time (click to see the values).
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? It would bother me, that's for sure. It costs nothing but a moment of your time to see if we are picking up on any insider selling.
A Different Perspective
Given that the market gained 0.7% in the last year, Troubadour Resources shareholders might be miffed that they lost 57%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. The share price decline has continued throughout the most recent three months, down 43%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
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.
