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Is Bee Vectoring Technologies International's (CVE:BEE) 197% Share Price Increase Well Justified?

Simply Wall St

Unfortunately, investing is risky - companies can and do go bankrupt. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! For example, the Bee Vectoring Technologies International Inc. (CVE:BEE) share price has soared 197% in the last year. Most would be very happy with that, especially in just one year! It's up an even more impressive 228% over the last quarter. Also impressive, the stock is up 98% over three years, making long term shareholders happy, too.

Check out our latest analysis for Bee Vectoring Technologies International

We don't think Bee Vectoring Technologies International's revenue of CA$58,084 is enough to establish significant demand. So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. Investors will be hoping that Bee Vectoring Technologies International can make progress and gain better traction for the business, before it runs low on cash.

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 companies like this go on to deliver on their plan, making good money for shareholders, many end in painful losses and eventual de-listing. Of course, if you time it right, high risk investments like this can really pay off, as Bee Vectoring Technologies International investors might know.

When it reported in June 2019 Bee Vectoring Technologies International had minimal cash in excess of all liabilities consider its expenditure: just CA$280k to be specific. So if it hasn't remedied the situation already, it will almost certainly have to raise more capital soon. It's a testament to the popularity of the business plan that the share price gained 74% in the last year , despite the weak balance sheet. You can see in the image below, how Bee Vectoring Technologies International's cash levels have changed over time (click to see the values). The image below shows how Bee Vectoring Technologies International's balance sheet has changed over time; if you want to see the precise values, simply click on the image.

TSXV:BEE Historical Debt, November 13th 2019

In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. However you can take a look at whether insiders have been buying up shares. It's often positive if so, assuming the buying is sustained and meaningful. You can click here to see if there are insiders buying.

A Different Perspective

It's nice to see that Bee Vectoring Technologies International shareholders have gained 197% (in total) over the last year. That's better than the annualized TSR of 26% over the last three years. These improved returns may hint at some real business momentum, implying that now could be a great time to delve deeper. You could get a better understanding of Bee Vectoring Technologies International's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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.