Yahoo Finance Did You Participate In Any Of DGR Global's (ASX:DGR) Fantastic 177% Return ?
DGR Global Limited (ASX:DGR) shareholders might be concerned after seeing the share price drop 12% in the last week. But that scarcely detracts from the really solid long term returns generated by the company over five years. We think most investors would be happy with the 143% return, over that period. To some, the recent pullback wouldn't be surprising after such a fast rise. Of course, that doesn't necessarily mean it's cheap now.
Check out our latest analysis for DGR Global
We don't think DGR Global's revenue of AU$1,596,000 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 DGR Global will find or develop a valuable new mine before too long.
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 companies like this go on to deliver on their plan, making good money for shareholders, many end in painful losses and eventual de-listing. Some DGR Global investors have already had a taste of the sweet taste stocks like this can leave in the mouth, as they gain popularity and attract speculative capital.
Our data indicates that DGR Global had AU$25m more in total liabilities than it had cash, when it last reported in June 2020. That makes it extremely high risk, in our view. So we're surprised to see the stock up 86% per year, over 5 years , but we're happy for holders. It's clear more than a few people believe in the potential. You can click on the image below to see (in greater detail) how DGR Global's cash levels have changed over time.
It can be extremely risky to invest in a company that doesn't even have revenue. There's no way to know its value easily. One thing you can do is check if company insiders are buying shares. If they are buying a significant amount of shares, that's certainly a good thing. You can click here to see if there are insiders buying.
What about the Total Shareholder Return (TSR)?
Investors should note that there's a difference between DGR Global's total shareholder return (TSR) and its share price change, which we've covered above. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. We note that DGR Global's TSR, at 177% is higher than its share price return of 143%. When you consider it hasn't been paying a dividend, this data suggests shareholders have benefitted from a spin-off, or had the opportunity to acquire attractively priced shares in a discounted capital raising.
A Different Perspective
It's good to see that DGR Global has rewarded shareholders with a total shareholder return of 9.2% in the last twelve months. However, the TSR over five years, coming in at 23% per year, is even more impressive. Potential buyers might understandably feel they've missed the opportunity, but it's always possible business is still firing on all cylinders. It's always interesting to track share price performance over the longer term. But to understand DGR Global better, we need to consider many other factors. Case in point: We've spotted 6 warning signs for DGR Global you should be aware of, and 3 of them shouldn't be ignored.
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.
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. 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.
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