Iovance Biotherapeutics (NASDAQ:IOVA) shareholders are still up 122% over 1 year despite pulling back 7.1% in the past week
Unless you borrow money to invest, the potential losses are limited. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! For example, the Iovance Biotherapeutics, Inc. (NASDAQ:IOVA) share price has soared 122% in the last 1 year. Most would be very happy with that, especially in just one year! On top of that, the share price is up 79% in about a quarter. This could be related to the recent financial results, released recently - you can catch up on the most recent data by reading our company report. In contrast, the longer term returns are negative, since the share price is 57% lower than it was three years ago.
Although Iovance Biotherapeutics has shed US$299m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.
See our latest analysis for Iovance Biotherapeutics
With just US$1,189,000 worth of revenue in twelve months, we don't think the market considers Iovance Biotherapeutics to have proven its business plan. 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 Iovance Biotherapeutics 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 the company needed to issue more shares recently so that it could raise enough 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. Of course, if you time it right, high risk investments like this can really pay off, as Iovance Biotherapeutics investors might know.
Iovance Biotherapeutics only just had cash in excess of all liabilities when it last reported. So it is a good thing that the company has looked to remedy the situation by raising more capital recently. Given the current cash position, investors must really like its potential for the share price to be up 92% in the last year. You can click on the image below to see (in greater detail) how Iovance Biotherapeutics' cash levels have changed over time.
Of course, the truth is that it is hard to value companies without much revenue or profit. One thing you can do is check if company insiders are buying 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 Iovance Biotherapeutics shareholders have received a total shareholder return of 122% over the last year. That gain is better than the annual TSR over five years, which is 8%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we've discovered 3 warning signs for Iovance Biotherapeutics (1 can't be ignored!) that you should be aware of before investing here.
Iovance Biotherapeutics is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
