This month, we saw the Orvana Minerals Corp. (TSE:ORV) up an impressive 40%. But don't envy holders -- looking back over 5 years the returns have been really bad. Indeed, the share price is down 55% in the period. So we're not so sure if the recent bounce should be celebrated. We'd err towards caution given the long term under-performance.
Orvana Minerals wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. 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, Orvana Minerals saw its revenue increase by 3.2% per year. That's not a very high growth rate considering it doesn't make profits. This lacklustre growth has no doubt fueled the loss of 15% per year, in that time. We'd want to see proof that future revenue growth is likely to be significantly stronger before getting too interested in Orvana Minerals. When a stock falls hard like this, some investors like to add the company to a watchlist (in case the business recovers, longer term).
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
If you are thinking of buying or selling Orvana Minerals stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
Orvana Minerals shareholders gained a total return of 6.1% during the year. Unfortunately this falls short of the market return. But at least that's still a gain! Over five years the TSR has been a reduction of 15% per year, over five years. So this might be a sign the business has turned its fortunes around. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
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 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.
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. Thank you for reading.