If You Had Bought ReNeuron Group (LON:RENE) Shares A Year Ago You'd Have Made 109%
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Unless you borrow money to invest, the potential losses are limited. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the ReNeuron Group plc (LON:RENE) share price had more than doubled in just one year - up 109%. Better yet, the share price has gained 239% in the last quarter. Zooming out, the stock is actually down 43% in the last three years.
Check out our latest analysis for ReNeuron Group
We don't think ReNeuron Group's revenue of UK£900,000 is enough to establish significant demand. 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. It seems likely some shareholders believe that ReNeuron Group has the funding to invent a new product before too long.
We think companies that have neither significant revenues nor profits are pretty 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. ReNeuron Group has already given some investors a taste of the sweet gains that high risk investing can generate, if your timing is right.
When it last reported its balance sheet in September 2018, ReNeuron Group had net cash of UK£25m. That's not too bad but management may have to think about raising capital or taking on debt, unless the company is close to breaking even. With the share price up 109% in the last year, the market is seems hopeful about the potential, despite the cash burn. You can click on the image below to see (in greater detail) how ReNeuron Group's cash and debt levels have changed over time.
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. If they are buying a significant amount of shares, that's certainly a good thing. You can click here to see if there are insiders buying.
A Different Perspective
We're pleased to report that ReNeuron Group shareholders have received a total shareholder return of 109% over one year. There's no doubt those recent returns are much better than the TSR loss of 11% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. Before spending more time on ReNeuron Group it might be wise to click here to see if insiders have been buying or selling shares.
We will like ReNeuron Group better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on GB 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.
