Yahoo Finance Strong week for Argonaut Gold (TSE:AR) shareholders doesn't alleviate pain of one-year loss
It is a pleasure to report that the Argonaut Gold Inc. (TSE:AR) is up 33% in the last quarter. But that is meagre solace when you consider how the price has plummeted over the last year. Indeed, the share price is down a whopping 77% in the last year. So the rise may not be much consolation. The real question is whether the company can turn around its fortunes.
On a more encouraging note the company has added CA$113m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.
View our latest analysis for Argonaut Gold
Given that Argonaut Gold didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
Argonaut Gold's revenue didn't grow at all in the last year. In fact, it fell 11%. That looks pretty grim, at a glance. The share price fall of 77% in a year tells the story. Holders should not lose the lesson: loss making companies should grow revenue. Of course, extreme share price falls can be an opportunity for those who are willing to really dig deeper to understand a high risk company like this.
You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).
It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. You can see what analysts are predicting for Argonaut Gold in this interactive graph of future profit estimates.
A Different Perspective
While the broader market lost about 9.1% in the twelve months, Argonaut Gold shareholders did even worse, losing 77%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 12% per year over five years. We realise that Baron Rothschild 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 business. It's always interesting to track share price performance over the longer term. But to understand Argonaut Gold better, we need to consider many other factors. For instance, we've identified 2 warning signs for Argonaut Gold (1 is potentially serious) that you should be aware of.
Argonaut Gold is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Canadian exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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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