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Can You Imagine How Chuffed Athabasca Minerals's (CVE:ABM) Shareholders Feel About Its 254% Share Price Gain?

Simply Wall St

When you buy shares in a company, there is always a risk that the price drops to zero. But if you pick the right stock, you can make a lot more than 100%. For example, the Athabasca Minerals Inc. (CVE:ABM) share price had more than doubled in just one year - up 254%. Also pleasing for shareholders was the 134% gain in the last three months. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report. Also impressive, the stock is up 170% over three years, making long term shareholders happy, too.

View our latest analysis for Athabasca Minerals

Athabasca Minerals isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last year Athabasca Minerals saw its revenue shrink by 31%. So we would not have expected the share price to rise 254%. This is a good example of how buyers can push up prices even before the fundamental metrics show much growth. Of course, it could be that the market expected this revenue drop.

The chart below shows how revenue and earnings have changed with time, (if you click on the chart you can see the actual values).

TSXV:ABM Income Statement, April 27th 2019

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. Dive deeper into the earnings by checking this interactive graph of Athabasca Minerals's earnings, revenue and cash flow.

A Different Perspective

It's good to see that Athabasca Minerals has rewarded shareholders with a total shareholder return of 254% in the last twelve months. That certainly beats the loss of about 18% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It is all well and good that insiders have been buying shares, but we suggest you check here to see what price insiders were buying at.

Athabasca Minerals is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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.