U.S. markets closed
  • S&P 500

    4,070.56
    +10.13 (+0.25%)
     
  • Dow 30

    33,978.08
    +28.67 (+0.08%)
     
  • Nasdaq

    11,621.71
    +109.30 (+0.95%)
     
  • Russell 2000

    1,911.46
    +8.39 (+0.44%)
     
  • Crude Oil

    79.38
    -1.63 (-2.01%)
     
  • Gold

    1,927.60
    -2.40 (-0.12%)
     
  • Silver

    23.73
    -0.30 (-1.23%)
     
  • EUR/USD

    1.0874
    -0.0018 (-0.16%)
     
  • 10-Yr Bond

    3.5180
    +0.0250 (+0.72%)
     
  • GBP/USD

    1.2395
    -0.0012 (-0.10%)
     
  • USD/JPY

    129.8040
    -0.3490 (-0.27%)
     
  • BTC-USD

    23,068.15
    +6.66 (+0.03%)
     
  • CMC Crypto 200

    526.66
    +9.65 (+1.87%)
     
  • FTSE 100

    7,765.15
    +4.04 (+0.05%)
     
  • Nikkei 225

    27,382.56
    +19.81 (+0.07%)
     

The Asanko Gold (TSE:AKG) Share Price Is Down 73% So Some Shareholders Are Rather Upset

As an investor, mistakes are inevitable. But really bad investments should be rare. So take a moment to sympathize with the long term shareholders of Asanko Gold Inc. (TSE:AKG), who have seen the share price tank a massive 73% over a three year period. That would be a disturbing experience. On the other hand the share price has bounced 8.9% over the last week.

Check out our latest analysis for Asanko Gold

Asanko Gold 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 shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. For example, investors may be hoping that Asanko Gold finds some valuable resources, before it runs out of money.

Companies that lack both meaningful revenue and profits are usually considered high risk. You should be aware that there is always a chance that this sort of company will need to issue more shares to raise money to continue pursuing its business plan. 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. It certainly is a dangerous place to invest, as Asanko Gold investors might realise.

Asanko Gold had cash in excess of all liabilities of US$11m when it last reported (September 2019). While that's nothing to panic about, there is some possibility the company will raise more capital, especially if profits are not imminent. We'd venture that shareholders are concerned about the need for more capital, because the share price has dropped 35% per year, over 3 years . You can see in the image below, how Asanko Gold's cash levels have changed over time (click to see the values). You can see in the image below, how Asanko Gold's cash levels have changed over time (click to see the values).

TSX:AKG Historical Debt, January 2nd 2020
TSX:AKG Historical Debt, January 2nd 2020

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? It would bother me, that's for sure. You can click here to see if there are insiders selling.

A Different Perspective

We're pleased to report that Asanko Gold shareholders have received a total shareholder return of 32% over one year. That certainly beats the loss of about 7.5% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. If you would like to research Asanko Gold in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.

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 CA exchanges.

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.

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. Thank you for reading.