Introducing Celcuity (NASDAQ:CELC), A Stock That Climbed 15% In The Last Year
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Passive investing in index funds can generate returns that roughly match the overall market. But you can significantly boost your returns by picking above-average stocks. To wit, the Celcuity Inc. (NASDAQ:CELC) share price is 15% higher than it was a year ago, much better than the market return of around 8.5% (not including dividends) in the same period. So that should have shareholders smiling. Celcuity hasn't been listed for long, so it's still not clear if it is a long term winner.
View our latest analysis for Celcuity
Celcuity hasn't yet reported any revenue yet, so it's as much a business idea as an actual business. So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. It seems likely some shareholders believe that Celcuity has the funding to invent a new product before too long.
Companies that lack both meaningful revenue and profits are usually considered 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.
When it last reported its balance sheet in December 2018, Celcuity could boast a strong position, with net cash of US$24m. This gives management the flexibility to drive business growth, without worrying too much about cash reserves. And with the share price up 15% in the last year, the market is focussed on that blue sky potential. You can click on the image below to see (in greater detail) how Celcuity's cash levels have changed over time.
Of course, the truth is that it is hard to value companies without much revenue or profit. However you can take a look at whether insiders have been buying up 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
It's nice to see that Celcuity shareholders have gained 15% over the last year. We regret to report that the share price is down 1.2% over ninety days. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. 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.
Celcuity 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 US 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.
