Yahoo Finance Announcing: Plymouth Rock Technologies (CSE:PRT) Stock Rocketed An Astounding 2300% In The Last Three Years
Generally speaking, investors are inspired to be stock pickers by the potential to find the big winners. Mistakes are inevitable, but a single top stock pick can cover any losses, and so much more. One such superstar is Plymouth Rock Technologies Inc. (CSE:PRT), which saw its share price soar 2300% in three years. And in the last month, the share price has gained -1.0%.
We love happy stories like this one. The company should be really proud of that performance!
Check out our latest analysis for Plymouth Rock Technologies
With just CA$20,106 worth of revenue in twelve months, we don't think the market considers Plymouth Rock Technologies 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). Investors will be hoping that Plymouth Rock Technologies can make progress and gain better traction for the business, before it runs low on cash.
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 such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt. Some Plymouth Rock Technologies 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.
When it reported in August 2019 Plymouth Rock Technologies had minimal cash in excess of all liabilities consider its expenditure: just CA$835k to be specific. So if it has not already moved to replenish reserves, we think the near-term chances of a capital raising event are pretty high. It's a testament to the popularity of the business plan that the share price gained 15% per year, over 3 years , despite the weak balance sheet. You can click on the image below to see (in greater detail) how Plymouth Rock Technologies's cash levels have changed over time. The image below shows how Plymouth Rock Technologies's balance sheet has changed over time; if you want to see the precise values, simply click on the image.
In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. Given that situation, many of the best investors like to check if insiders have been buying shares. If they are buying a significant amount of shares, that's certainly a good thing. Luckily we are in a position to provide you with this free chart of insider buying (and selling).
A Different Perspective
While the broader market gained around 14% in the last year, Plymouth Rock Technologies shareholders lost 11%. 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. Longer term investors wouldn't be so upset, since they would have made 26%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. You could get a better understanding of Plymouth Rock Technologies's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CA 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.
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