Yahoo Finance The Tamaska Oil and Gas (ASX:TMK) Share Price Has Gained 75% And Shareholders Are Hoping For More
It hasn't been the best quarter for Tamaska Oil and Gas Limited (ASX:TMK) shareholders, since the share price has fallen 22% in that time. While that might be a setback, it doesn't negate the nice returns received over the last twelve months. Looking at the full year, the company has easily bested an index fund by gaining 75%.
See our latest analysis for Tamaska Oil and Gas
We don't think Tamaska Oil and Gas's revenue of AU$3,714 is enough to establish significant demand. 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. For example, they may be hoping that Tamaska Oil and Gas finds fossil fuels with an exploration program, before it runs out of money.
We think companies that have neither significant revenues nor profits are pretty high risk. There was already a significant chance that they would need more money for business development, and indeed they recently put themselves at the mercy of capital markets and raised equity. So the share price itself impacts the value of the shares (as it determines the cost of capital). While some such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt. Of course, if you time it right, high risk investments like this can really pay off, as Tamaska Oil and Gas investors might know.
Tamaska Oil and Gas had plenty of cash in the bank when it last reported. That allows management to focus on growing the business, and not feel like the recent capital raising was a matter of urgency. And with the share price up 111% in the last year , the market is focussed on that blue sky potential. You can see in the image below, how Tamaska Oil and Gas's cash levels have changed over time (click to see the values).
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. 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).
What about the Total Shareholder Return (TSR)?
Investors should note that there's a difference between Tamaska Oil and Gas's total shareholder return (TSR) and its share price change, which we've covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. We note that Tamaska Oil and Gas's TSR, at 75% is higher than its share price return of 75%. 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 nice to see that Tamaska Oil and Gas shareholders have received a total shareholder return of 75% over the last year. That certainly beats the loss of about 9.0% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Tamaska Oil and Gas better, we need to consider many other factors. For example, we've discovered 4 warning signs for Tamaska Oil and Gas (3 make us uncomfortable!) that you should be aware of before investing here.
But note: Tamaska Oil and Gas may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.
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.
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. Thank you for reading.
