Yahoo Finance Investors Who Bought Apellis Pharmaceuticals (NASDAQ:APLS) Shares A Year Ago Are Now Up 10%
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If you want to compound wealth in the stock market, you can do so by buying an index fund. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). To wit, the Apellis Pharmaceuticals, Inc. (NASDAQ:APLS) share price is 10% higher than it was a year ago, much better than the market return of around 0.2% (not including dividends) in the same period. If it can keep that out-performance up over the long term, investors will do very well! We'll need to follow Apellis Pharmaceuticals for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.
Check out our latest analysis for Apellis Pharmaceuticals
Apellis Pharmaceuticals hasn't yet reported any revenue yet, so it's as much a business idea as an actual business. So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). For example, they may be hoping that Apellis Pharmaceuticals comes up with a great new treatment, before it runs out of money.
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 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).
Apellis Pharmaceuticals had cash in excess of all liabilities of US$195m when it last reported (March 2019). That's not too bad but management may have to think about raising capital or taking on debt, unless the company is close to breaking even. With the share price up 10% in the last year, the market is seems hopeful about the potential, despite the cash burn. You can see in the image below, how Apellis Pharmaceuticals's cash levels have changed over time (click to see the values).
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. You can click here to see if there are insiders buying.
A Different Perspective
It's nice to see that Apellis Pharmaceuticals shareholders have gained 10% over the last year. And the share price momentum remains respectable, with a gain of 18% in the last three months. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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.
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. Thank you for reading.
