Reliq Health Technologies Inc. (CVE:RHT) shareholders might be concerned after seeing the share price drop 11% in the last month. But that doesn't displace its brilliant performance over three years. In fact, the share price has taken off in that time, up 410%. As long term investors the recent fall doesn't detract all that much from the longer term story. The share price action could signify that the business itself is dramatically improved, in that time.
Reliq Health Technologies recorded just CA$455,265 in revenue over the last twelve months, which isn't really enough for us to consider it to have a proven product. So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). It seems likely some shareholders believe that Reliq Health Technologies will significantly advance the business plan before too long.
As a general rule, if a company doesn't have much revenue, and it loses money, then it is a high risk investment. 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 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). Reliq Health Technologies has already given some investors a taste of the sweet gains that high risk investing can generate, if your timing is right.
Our data indicates that Reliq Health Technologies had CA$1.1m more in total liabilities than it had cash, when it last reported in September 2019. That makes it extremely high risk, in our view. So we're surprised to see the stock up 49% per year, over 3 years , but we're happy for holders. Investors must really like its potential. The image below shows how Reliq Health Technologies's balance sheet has changed over time; if you want to see the precise values, simply click on the image. You can see in the image below, how Reliq Health Technologies's cash levels have changed over time (click to see the values).
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. 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
Pleasingly, Reliq Health Technologies's total shareholder return last year was 100%. That gain actually surpasses the 72% TSR it generated (per year) over three years. Given the track record of solid returns over varying time frames, it might be worth putting Reliq Health Technologies on your watchlist. If you would like to research Reliq Health Technologies in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
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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