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Did You Miss AfriTin Mining's (LON:ATM) Impressive 110% Share Price Gain?

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The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But if you buy shares in a really great company, you can more than double your money. To wit, the AfriTin Mining Limited (LON:ATM) share price has flown 110% in the last three years. That sort of return is as solid as granite. It's also good to see the share price up 92% over the last quarter.

View our latest analysis for AfriTin Mining

AfriTin Mining recorded just UK£1,153,028 in revenue over the last twelve months, which isn't really enough for us to consider it to have a proven product. As a result, we think it's unlikely shareholders are paying much attention to current revenue, but rather speculating on growth in the years to come. For example, investors may be hoping that AfriTin Mining finds some valuable resources, before it runs out of money.

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 do very well over the long term, others become hyped up by promoters before eventually falling back down to earth, and going bankrupt (or being recapitalized). AfriTin Mining 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 AfriTin Mining had UK£1.1m more in total liabilities than it had cash, when it last reported in August 2020. That makes it extremely high risk, in our view. So the fact that the stock is up 96% per year, over 3 years shows that high risks can lead to high rewards, sometimes. Investors must really like its potential. You can see in the image below, how AfriTin Mining's cash levels have changed over time (click to see the values).

debt-equity-history-analysis
debt-equity-history-analysis

It can be extremely risky to invest in a company that doesn't even have revenue. There's no way to know its value easily. 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

It's nice to see that AfriTin Mining shareholders have gained 57% (in total) over the last year. So this year's TSR was actually better than the three-year TSR (annualized) of 28%. These improved returns may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand AfriTin Mining better, we need to consider many other factors. Even so, be aware that AfriTin Mining is showing 6 warning signs in our investment analysis , and 2 of those are potentially serious...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB exchanges.

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. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.