The simplest way to invest in stocks is to buy exchange traded funds. But you can significantly boost your returns by picking above-average stocks. To wit, the iMining Blockchain and Cryptocurrency Inc. (CVE:IMIN) share price is 56% higher than it was a year ago, much better than the market decline of around 14% (not including dividends) in the same period. So that should have shareholders smiling. In contrast, the longer term returns are negative, since the share price is 33% lower than it was three years ago.
iMining Blockchain and Cryptocurrency didn’t have any revenue in the last year, so it’s fair to say it doesn’t yet have a proven product (or at least not one people are paying for). So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. Investors will be hoping that iMining Blockchain and Cryptocurrency can make progress and gain better traction for the business, before it runs low on cash.
Companies that lack both meaningful revenue and profits are usually considered high risk. There is almost always a chance they will need to raise more capital, and their progress – and share price – will dictate how dilutive that is to current holders. 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). iMining Blockchain and Cryptocurrency has already given some investors a taste of the sweet gains that high risk investing can generate, if your timing is right.
iMining Blockchain and Cryptocurrency had liabilities exceeding cash by CA$236k when it last reported in February 2020, according to our data. That makes it extremely high risk, in our view. So we’re surprised to see the stock up 122% in the last year , but we’re happy for holders. It’s clear more than a few people believe in the potential. The image below shows how iMining Blockchain and Cryptocurrency’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. 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 iMining Blockchain and Cryptocurrency shareholders have received a total shareholder return of 56% over the last year. There’s no doubt those recent returns are much better than the TSR loss of 1.4% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. It’s always interesting to track share price performance over the longer term. But to understand iMining Blockchain and Cryptocurrency better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We’ve identified 6 warning signs with iMining Blockchain and Cryptocurrency (at least 4 which are potentially serious) , and understanding them should be part of your investment process.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will 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.
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.
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