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The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But if you buy shares in a really great company, you can more than double your money. For instance the Borgosesia S.p.A. (BIT:BO) share price is 118% higher than it was three years ago. Most would be happy with that. Meanwhile the share price is 5.0% higher than it was a week ago.
View our latest analysis for Borgosesia
With just €356,410 worth of revenue in twelve months, we don't think the market considers Borgosesia to have proven its business plan. 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 Borgosesia 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 companies like this go on to deliver on their plan, making good money for shareholders, many end in painful losses and eventual de-listing. Borgosesia has already given some investors a taste of the sweet gains that high risk investing can generate, if your timing is right.
Our data indicates that Borgosesia had €2.1m 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 94% per year, over 3 years , but we're happy for holders. Investors must really like its potential. You can see in the image below, how Borgosesia's cash levels have changed over time (click to see the values). You can see in the image below, how Borgosesia's cash levels have changed over time (click to see the values).
Of course, the truth is that it is hard to value companies without much revenue or profit. Given that situation, many of the best investors like to check if insiders have been 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).
A Different Perspective
Borgosesia shareholders are up 1.9% for the year. But that was short of the market average. But at least that's still a gain! Over five years the TSR has been a reduction of 7.7% per year, over five years. So this might be a sign the business has turned its fortunes around. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For instance, we've identified 2 warning signs for Borgosesia that you should be aware of.