The last three months have been tough on Koios Beverage Corp. (CNSX:KBEV) shareholders, who have seen the share price decline a rather worrying 42%. But looking back over the last year, the returns have actually been rather pleasing! To wit, it had solidly beat the market, up 13%.
We don't think Koios Beverage's revenue of US$55,825 is enough to establish significant demand. 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 Koios Beverage will significantly advance the business plan before too long.
We think companies that have neither significant revenues nor profits are pretty high risk. There is usually a significant chance that they will need more money for business development, putting them at the mercy of capital markets. So the share price itself impacts the value of the shares (as it determines the cost of capital). While some such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt.
Koios Beverage had liabilities exceeding cash by US$69,599 when it last reported in February 2019, according to our data. That makes it extremely high risk, in our view. So we're surprised to see the stock up 13% in the last year, but we're happy for holders. Investors must really like its potential. The image below shows how Koios Beverage's balance sheet has changed over time; if you want to see the precise values, simply click on the image. The image below shows how Koios Beverage's balance sheet has changed over time; if you want to see the precise values, simply click on the image.
In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. Given that situation, many of the best investors like to check if insiders have been buying shares. It's often positive if so, assuming the buying is sustained and meaningful. You can click here to see if there are insiders buying.
A Different Perspective
It's nice to see that Koios Beverage shareholders have gained 13% over the last year. We regret to report that the share price is down 42% over ninety days. Shorter term share price moves often don't signify much about the business itself. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.
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.
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.