Yahoo Finance Imagine Owning Marechale Capital (LON:MAC) While The Price Tanked 51%
If you are building a properly diversified stock portfolio, the chances are some of your picks will perform badly. But the long term shareholders of Marechale Capital Plc (LON:MAC) have had an unfortunate run in the last three years. Regrettably, they have had to cope with a 51% drop in the share price over that period. The more recent news is of little comfort, with the share price down 33% in a year. Unhappily, the share price slid 13% in the last week.
See our latest analysis for Marechale Capital
We don't think Marechale Capital's revenue of UK£548,042 is enough to establish significant demand. 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. Investors will be hoping that Marechale Capital can make progress and gain better traction for the business, before it runs low on cash.
Companies that lack both meaningful revenue and profits are usually considered high risk. You should be aware that there is always a chance that this sort of company will need to issue more shares to raise money to continue pursuing its business plan. 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. Marechale Capital has already given some investors a taste of the bitter losses that high risk investing can cause.
Our data indicates that Marechale Capital had UK£44k more in total liabilities than it had cash, when it last reported in October 2019. That puts it in the highest risk category, according to our analysis. But with the share price diving 21% per year, over 3 years , it's probably fair to say that some shareholders no longer believe the company will succeed. The image below shows how Marechale Capital'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 Marechale Capital's balance sheet has changed over time; if you want to see the precise values, simply click on the image.
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. Given that situation, would you be concerned if it turned out insiders were relentlessly selling stock? It would bother me, that's for sure. It costs nothing but a moment of your time to see if we are picking up on any insider selling.
A Different Perspective
We regret to report that Marechale Capital shareholders are down 33% for the year. Unfortunately, that's worse than the broader market decline of 19%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 8.9% over the last half decade. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand Marechale Capital better, we need to consider many other factors. To that end, you should learn about the 6 warning signs we've spotted with Marechale Capital (including 3 which is are potentially serious) .
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 GB 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.
