In This Article:
While Alice Queen Limited (ASX:AQX) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 26% in the last quarter. But that doesn't change the fact that the returns over the last year have been very strong. Indeed, the share price is up an impressive 117% in that time. So it may be that the share price is simply cooling off after a strong rise. Investors should be wondering whether the business itself has the fundamental value required to continue to drive gains.
See our latest analysis for Alice Queen
Alice Queen recorded just AU$1,249 in revenue over the last twelve months, which isn't really enough for us to consider it to have a proven product. 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. It seems likely some shareholders believe that Alice Queen will find or develop a valuable new mine 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 companies like this go on to deliver on their plan, making good money for shareholders, many end in painful losses and eventual de-listing. Some Alice Queen 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.
Alice Queen had liabilities exceeding cash by AU$310k when it last reported in June 2019, according to our data. That makes it extremely high risk, in our view. So we're surprised to see the stock up 94% in the last year , but we're happy for holders. Investors must really like its potential. You can click on the image below to see (in greater detail) how Alice Queen's cash levels have changed over time. You can see in the image below, how Alice Queen'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. Luckily we are in a position to provide you with this free chart of insider buying (and selling).
A Different Perspective
It's nice to see that Alice Queen shareholders have gained 117% (in total) over the last year. What is absolutely clear is that is far preferable to the dismal 0.8% average annual loss suffered over the last three years. We're generally cautious about putting too much weigh on shorter term data, but the recent improvement is definitely a positive. Shareholders might want to examine this detailed historical graph of past earnings, revenue and cash flow.