Yahoo Finance Introducing Copper Fox Metals (CVE:CUU), The Stock That Slid 60% In The Last Five Years
This week we saw the Copper Fox Metals Inc. (CVE:CUU) share price climb by 19%. But that doesn't change the fact that the returns over the last half decade have been disappointing. Indeed, the share price is down 60% in the period. So we're hesitant to put much weight behind the short term increase. We'd err towards caution given the long term under-performance.
View our latest analysis for Copper Fox Metals
Copper Fox Metals 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). We can't help wondering why it's publicly listed so early in its journey. Are venture capitalists not interested? So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. It seems likely some shareholders believe that Copper Fox Metals 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 usually a significant chance that they will need more money for business development, putting them at the mercy of capital markets. So the share price itself impacts the value of the shares (as it determines the cost of capital). 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 Copper Fox Metals investors have already had a taste of the bitterness stocks like this can leave in the mouth.
Our data indicates that Copper Fox Metals had CA$630,032 more in total liabilities than it had cash, when it last reported in April 2019. That makes it extremely high risk, in our view. But with the share price diving 17% per year, over 5 years, it's probably fair to say that some shareholders no longer believe the company will succeed. You can click on the image below to see (in greater detail) how Copper Fox Metals's cash levels have changed over time. You can click on the image below to see (in greater detail) how Copper Fox Metals's cash levels have changed over time.
Of course, the truth is that it is hard to value companies without much revenue or profit. Given that situation, would you be concerned if it turned out insiders were relentlessly selling stock? I'd like that just about as much as I like to drink milk and fruit juice mixed together. It only takes a moment for you to check whether we have identified any insider sales recently.
A Different Perspective
While the broader market gained around 1.3% in the last year, Copper Fox Metals shareholders lost 9.5%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. However, the loss over the last year isn't as bad as the 17% per annum loss investors have suffered over the last half decade. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares - and the price they paid.
Copper Fox Metals is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA exchanges.
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