These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). To wit, the Green River Gold Corp. (CNSX:CCR) share price is 20% higher than it was a year ago, much better than the market return of around 8.3% (not including dividends) in the same period. So that should have shareholders smiling. We'll need to follow Green River Gold for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.
We don't think Green River Gold's revenue of CA$3,850 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. For example, investors may be hoping that Green River Gold finds some valuable resources, before it runs out of money.
Companies that lack both meaningful revenue and profits are usually considered high risk. There is usually a significant chance that they will need more money for business development, putting them at the mercy of capital markets. So the share price itself impacts the value of the shares (as it determines the cost of capital). 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).
Our data indicates that Green River Gold had CA$164k more in total liabilities than it had cash, when it last reported in June 2019. That makes it extremely high risk, in our view. So we're surprised to see the stock up 149% in the last year , 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 Green River Gold's cash levels have changed over time. You can see in the image below, how Green River Gold's cash levels have changed over time (click to see the values).
Of course, the truth is that it is hard to value companies without much revenue or profit. One thing you can do is check if company insiders are buying shares. It's usually a positive if they have, as it may indicate they see value in the stock. Luckily we are in a position to provide you with this free chart of insider buying (and selling).
A Different Perspective
Green River Gold shareholders should be happy with the total gain of 20% over the last twelve months. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
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 email@example.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.
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