Yahoo Finance The Celamin Holdings (ASX:CNL) Share Price Is Up 132% And Shareholders Are Boasting About It
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Unfortunately, investing is risky - companies can and do go bankrupt. But if you pick the right stock, you can make a lot more than 100%. Take, for example Celamin Holdings Limited (ASX:CNL). Its share price is already up an impressive 132% in the last twelve months. The last week saw the share price soften some 7.1%. We'll need to follow Celamin Holdings for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.
Check out our latest analysis for Celamin Holdings
With zero revenue generated over twelve months, we don't think that Celamin Holdings has proved its business plan yet. So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). For example, investors may be hoping that Celamin Holdings finds some valuable resources, before it runs out of money.
We think companies that have neither significant revenues nor profits are pretty high risk. 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 companies like this go on to deliver on their plan, making good money for shareholders, many end in painful losses and eventual de-listing. Celamin Holdings has already given some investors a taste of the sweet gains that high risk investing can generate, if your timing is right.
When it reported in December 2018 Celamin Holdings had minimal cash in excess of all liabilities consider its expenditure: just AU$244k to be specific. So if it has not already moved to replenish reserves, we think the near-term chances of a capital raising event are pretty high. Given how low on cash the it got, investors must really like its potential for the share price to be up 132% in the last year. The image below shows how Celamin Holdings's balance sheet has changed over time; if you want to see the precise values, simply click on the image.
Of course, the truth is that it is hard to value companies without much revenue or profit. Given that situation, many of the best investors like to check if insiders have been buying shares. It's usually a positive if they have, as it may indicate they see value in the stock. You can click here to see if there are insiders buying.
A Different Perspective
It's nice to see that Celamin Holdings shareholders have received a total shareholder return of 132% over the last year. There's no doubt those recent returns are much better than the TSR loss of 51% per year over five years. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.
Of course Celamin Holdings may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.
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.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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. Thank you for reading.
