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It hasn't been the best quarter for Blue Chip India Limited (NSE:BLUECHIP) shareholders, since the share price has fallen 22% in that time. On the other hand, over the last twelve months the stock has delivered rather impressive returns. During that period, the share price soared a full 133%. So we think most shareholders won't be too upset about the recent fall. More important, going forward, is how the business itself is going.
See our latest analysis for Blue Chip India
With just ₹255,444 worth of revenue in twelve months, we don't think the market considers Blue Chip India to have proven its business plan. 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. Investors will be hoping that Blue Chip India can make progress and gain better traction for the business, before it runs low on cash.
As a general rule, if a company doesn't have much revenue, and it loses money, then it is a high risk investment. 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 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). Some Blue Chip India 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.
Our data indicates that Blue Chip India had ₹53m more in total liabilities than it had cash, when it last reported in June 2019. That makes it extremely high risk, in our view. So we're surprised to see the stock up 89% in the last year , but we're happy for holders. Investors must really like its potential. The image below shows how Blue Chip India's balance sheet has changed over time; if you want to see the precise values, simply click on the image. You can click on the image below to see (in greater detail) how Blue Chip India's cash levels have changed over time.
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
We're pleased to report that Blue Chip India shareholders have received a total shareholder return of 133% over one year. There's no doubt those recent returns are much better than the TSR loss of 6.9% per year over five years. 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. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.