Yahoo Finance The iSIGN Media Solutions (CVE:ISD) Share Price Is Down 71% So Some Shareholders Are Rather Upset
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
Long term investing is the way to go, but that doesn't mean you should hold every stock forever. We really hate to see fellow investors lose their hard-earned money. Spare a thought for those who held iSIGN Media Solutions Inc. (CVE:ISD) for five whole years - as the share price tanked 71%. And it's not just long term holders hurting, because the stock is down 33% in the last year.
Check out our latest analysis for iSIGN Media Solutions
With just CA$21,671 worth of revenue in twelve months, we don't think the market considers iSIGN Media Solutions to have proven its business plan. You have to wonder why venture capitalists aren't funding it. So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). Investors will be hoping that iSIGN Media Solutions can make progress and gain better traction for the business, before it runs low on cash.
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 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 iSIGN Media Solutions investors might realise.
iSIGN Media Solutions had net debt of CA$4,121,533 when it last reported in January 2019, according to our data. That makes it extremely high risk, in our view. But with the share price diving 22% per year, over 5 years, it's probably fair to say that some shareholders no longer believe the company will succeed. The image below shows how iSIGN Media Solutions's balance sheet has changed over time; if you want to see the precise values, simply click on the image.
Of course, the truth is that it is hard to value companies without much revenue or profit. Given that situation, would you be concerned if it turned out insiders were relentlessly selling stock? I'd like that just about as much as I like to drink milk and fruit juice mixed together. It costs nothing but a moment of your time to see if we are picking up on any insider selling.
A Different Perspective
iSIGN Media Solutions shareholders are down 33% for the year, but the market itself is up 6.3%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 22% 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. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.
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.
