Some QMC Quantum Minerals Corp (CVE:QMC) shareholders are probably rather concerned to see the share price fall 34% over the last three months. But that doesn't change the fact that the returns over the last three years have been spectacular. The longer term view reveals that the share price is up 975% in that period. So the recent fall doesn't do much to dampen our respect for the business. The share price action could signify that the business itself is dramatically improved, in that time.
We love happy stories like this one. The company should be really proud of that performance!
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QMC Quantum Minerals hasn't yet reported any revenue yet, so it's as much a business idea as an actual business. So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. It seems likely some shareholders believe that QMC Quantum Minerals will find or develop a valuable new mine before too long.
We think companies that have neither significant revenues nor profits are pretty 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. QMC Quantum Minerals has already given some investors a taste of the sweet gains that high risk investing can generate, if your timing is right.
Our data indicates that QMC Quantum Minerals had CA$1,128,697 more in total liabilities than it had cash, when it last reported in February 2019. That makes it extremely high risk, in our view. So we're surprised to see the stock up 121% per year, over 3 years, 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 QMC Quantum Minerals'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 often positive if so, assuming the buying is sustained and meaningful. Luckily we are in a position to provide you with this free chart of insider buying (and selling).
A Different Perspective
While the broader market gained around 1.6% in the last year, QMC Quantum Minerals shareholders lost 62%. 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. On the bright side, long term shareholders have made money, with a gain of 34% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. If you would like to research QMC Quantum Minerals in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
Of course QMC Quantum Minerals may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
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 firstname.lastname@example.org. 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.