Yahoo Finance Such Is Life: How Clean Seed Capital Group (CVE:CSX) Shareholders Saw Their Shares Drop 67%
Generally speaking long term investing is the way to go. But that doesn't mean long term investors can avoid big losses. To wit, the Clean Seed Capital Group Ltd. (CVE:CSX) share price managed to fall 67% over five long years. That is extremely sub-optimal, to say the least. And we doubt long term believers are the only worried holders, since the stock price has declined 64% over the last twelve months. The falls have accelerated recently, with the share price down 32% in the last three months.
See our latest analysis for Clean Seed Capital Group
Clean Seed Capital Group didn't have any revenue in the last year, so it's fair to say it doesn't yet have a proven product (or at least not one people are paying for). We can't help wondering why it's publicly listed so early in its journey. Are venture capitalists not interested? 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 Clean Seed Capital Group can make progress and gain better traction for the business, before it runs low on cash.
Companies that lack both meaningful revenue and profits are usually considered high risk. 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. Some Clean Seed Capital Group investors have already had a taste of the bitterness stocks like this can leave in the mouth.
Clean Seed Capital Group had liabilities exceeding cash by CA$5,424,432 when it last reported in March 2019, according to our data. That puts it in the highest risk category, according to our analysis. But with the share price diving 20% per year, over 5 years, it's probably fair to say that some shareholders no longer believe the company will succeed. You can see in the image below, how Clean Seed Capital Group's cash levels have changed over time (click to see the values). The image below shows how Clean Seed Capital Group'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. 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
Clean Seed Capital Group shareholders are down 64% for the year, but the market itself is up 1.5%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 20% per year over five years. We realise that Buffett has said investors should 'buy when there is blood on the streets', but we caution that investors should first be sure they are buying a high quality businesses. You could get a better understanding of Clean Seed Capital Group's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
If you are like me, then you will 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.
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.
