Yahoo Finance The Greenland Minerals (ASX:GGG) Share Price Has Gained 77% And Shareholders Are Hoping For More
Greenland Minerals Limited (ASX:GGG) shareholders have seen the share price descend 15% over the month. But don't let that distract from the very nice return generated over three years. After all, the share price is up a market-beating 77% in that time.
View our latest analysis for Greenland Minerals
With just AU$82,000 worth of revenue in twelve months, we don't think the market considers Greenland Minerals to have proven its business plan. 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 Greenland Minerals will find or develop a valuable new mine before too long.
We think companies that have neither significant revenues nor profits are pretty 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. Greenland Minerals 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 June 2019 Greenland Minerals had minimal cash in excess of all liabilities consider its expenditure: just AU$2.7m to be specific. So if it hasn't remedied the situation already, it will almost certainly have to raise more capital soon. It's a testament to the popularity of the business plan that the share price gained 110% per year, over 3 years , despite the weak balance sheet. The image below shows how Greenland Minerals'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 Greenland Minerals'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. However you can take a look at whether insiders have been buying up shares. It's often positive if so, assuming the buying is sustained and meaningful. Luckily we are in a position to provide you with this free chart of insider buying (and selling).
A Different Perspective
We're pleased to report that Greenland Minerals shareholders have received a total shareholder return of 29% over one year. That's better than the annualised return of 8.5% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. Before spending more time on Greenland Minerals it might be wise to click here to see if insiders have been buying or selling shares.
We will like Greenland Minerals better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.
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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.
