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It might seem bad, but the worst that can happen when you buy a stock (without leverage) is that its share price goes to zero. But if you buy shares in a really great company, you can more than double your money. To wit, the LIDDS AB (publ) (STO:LIDDS) share price has flown 175% in the last three years. That sort of return is as solid as granite. On top of that, the share price is up 14% in about a quarter. This could be related to the recent financial results, released recently - you can catch up on the most recent data by reading our company report.
View our latest analysis for LIDDS
With just kr7,754,708 worth of revenue in twelve months, we don't think the market considers LIDDS to have proven its business plan. So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). It seems likely some shareholders believe that LIDDS has the funding to invent a new product before too long.
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). Some LIDDS 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.
When it reported in June 2019 LIDDS had minimal cash in excess of all liabilities consider its expenditure: just kr12m to be specific. So if it hasn't remedied the situation already, it will almost certainly have to raise more capital soon. Given how low on cash the it got, investors must really like its potential for the share price to be up 78% per year, over 3 years . You can see in the image below, how LIDDS's cash levels have changed over time (click to see the values). You can click on the image below to see (in greater detail) how LIDDS'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. It's usually a positive if they have, as it may indicate they see value in the stock. Luckily we are in a position to provide you with this free chart of insider buying (and selling).