Yahoo Finance The PNX Metals (ASX:PNX) Share Price Is Down 67% So Some Shareholders Are Wishing They Sold
It is a pleasure to report that the PNX Metals Limited (ASX:PNX) is up 33% in the last quarter. But that is little comfort to those holding over the last half decade, sitting on a big loss. In fact, the share price has declined rather badly, down some 67% in that time. Some might say the recent bounce is to be expected after such a bad drop. But it could be that the fall was overdone.
View our latest analysis for PNX Metals
With just AU$50,431 worth of revenue in twelve months, we don't think the market considers PNX Metals to have proven its business plan. You have to wonder why venture capitalists aren't funding it. As a result, we think it's unlikely shareholders are paying much attention to current revenue, but rather speculating on growth in the years to come. It seems likely some shareholders believe that PNX Metals 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. We can see that they needed to raise more capital, and took that step recently despite the fact that it would have been dilutive 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). PNX Metals has already given some investors a taste of the bitter losses that high risk investing can cause.
When it last reported, PNX Metals had minimal cash in excess of all liabilities. So it's prudent that the management team has already moved to replenish reserves through the recent capital raising event. The cash situation might not explain why the share price is down 20% per year, over 5 years. The image below shows how PNX Metals'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. Would it bother you if insiders were selling the stock? I'd like that just about as much as I like to drink milk and fruit juice mixed together. It costs nothing but a moment of your time to see if we are picking up on any insider selling.
A Different Perspective
It's good to see that PNX Metals has rewarded shareholders with a total shareholder return of 60% in the last twelve months. Notably the five-year annualised TSR loss of 20% per year compares very unfavourably with the recent share price performance. 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. It's always interesting to track share price performance over the longer term. But to understand PNX Metals better, we need to consider many other factors. To that end, you should learn about the 5 warning signs we've spotted with PNX Metals (including 1 which is is potentially serious) .
If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.
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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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. Thank you for reading.
