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Investors Who Bought Denison Mines (TSE:DML) Shares Five Years Ago Are Now Down 54%

Simply Wall St

Denison Mines Corp. (TSE:DML) shareholders should be happy to see the share price up 18% in the last quarter. But don't envy holders -- looking back over 5 years the returns have been really bad. Indeed, the share price is down 54% in the period. So is the recent increase sufficient to restore confidence in the stock? Not yet. But it could be that the fall was overdone.

See our latest analysis for Denison Mines

Denison Mines isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last half decade, Denison Mines saw its revenue increase by 7.0% per year. That's a pretty good rate for a long time period. The share price return isn't so respectable with an annual loss of 14% over the period. That suggests the market is disappointed with the current growth rate. A pessimistic market can create opportunities.

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

TSX:DML Income Statement, April 11th 2019

We consider it positive that insiders have made significant purchases in the last year. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. This free report showing analyst forecasts should help you form a view on Denison Mines

A Different Perspective

We're pleased to report that Denison Mines shareholders have received a total shareholder return of 31% over one year. There's no doubt those recent returns are much better than the TSR loss of 14% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares - and the price they paid.

Denison Mines 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.