In This Article:
Want to participate in a short research study? Help shape the future of investing tools and you could win a $250 gift card!
It hasn't been the best quarter for Creo Medical Limited (LON:CREO) shareholders, since the share price has fallen 19% in that time. But looking back over the last year, the returns have actually been rather pleasing! To wit, it had solidly beat the market, up 31%.
See our latest analysis for Creo Medical
With just UK£254,826 worth of revenue in twelve months, we don't think the market considers Creo Medical 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 Creo Medical 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 go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt.
Creo Medical has plenty of cash in the bank, with net cash sitting at UK£43m, when it last reported (December 2018). That allows management to focus on growing the business, and not worry too much about raising capital. And given that the share price has shot up 31% in the last year, its fair to say investors are liking management's vision for the future. You can see in the image below, how Creo Medical'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. One thing you can do is check if company insiders are 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
Creo Medical boasts a total shareholder return of 31% for the last year. Unfortunately the share price is down 19% over the last quarter. It may simply be that the share price got ahead of itself, although there may have been fundamental developments that are weighing on it. You could get a better understanding of Creo Medical's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
Of course Creo Medical may not be the best stock to buy. So you may wish to see this free collection of growth stocks.