Active investing isn't easy, but for those that do it, the aim is to find the best companies to buy, and to profit handsomely. When you buy and hold the right company, the returns can make a huge difference to both you and your family. In the case of Fertoz Limited (ASX:FTZ), the share price is up an incredible 422% in the last year alone. Also pleasing for shareholders was the 71% gain in the last three months. Also impressive, the stock is up 100% over three years, making long term shareholders happy, too.

So let's assess the underlying fundamentals over the last 1 year and see if they've moved in lock-step with shareholder returns.

See our latest analysis for Fertoz

We don't think Fertoz's revenue of AU$2,255,011 is enough to establish significant demand. 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 Fertoz 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 to raise equity. So the share price itself impacts the value of the shares (as it determines the cost of capital). While some such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt. Fertoz has already given some investors a taste of the sweet gains that high risk investing can generate, if your timing is right.

When it reported in June 2021 Fertoz had minimal cash in excess of all liabilities consider its expenditure: just AU$987k to be specific. So if it has not already moved to replenish reserves, we think the near-term chances of a capital raising event are pretty high. It's a testament to the popularity of the business plan that the share price gained 48% in the last year , despite the weak balance sheet. You can see in the image below, how Fertoz's cash levels have changed over time (click to see the values).

It can be extremely risky to invest in a company that doesn't even have revenue. There's no way to know its value easily. However you can take a look at whether insiders have been buying up 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).