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The simplest way to benefit from a rising market is to buy an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. Unfortunately the Gore Street Energy Storage Fund Plc (LON:GSF) share price slid 11% over twelve months. That falls noticeably short of the market return of around 0.6%. Gore Street Energy Storage Fund may have better days ahead, of course; we've only looked at a one year period. On the other hand, we note it's up 8.8% in about a month.
View our latest analysis for Gore Street Energy Storage Fund
Gore Street Energy Storage Fund hasn't yet reported any revenue yet, so it's as much a business idea as an actual business. This state of affairs suggests that venture capitalists won't provide funds on attractive terms. 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. Investors will be hoping that Gore Street Energy Storage Fund 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.
When it last reported its balance sheet in March 2019, Gore Street Energy Storage Fund could boast a strong position, with cash in excess of all liabilities of UK£17m. This gives management the flexibility to drive business growth, without worrying too much about cash reserves. But since the share price has dropped 11% in the last year, it seems like the market might have been over-excited previously. The image below shows how Gore Street Energy Storage Fund's balance sheet has changed over time; if you want to see the precise values, simply click on the image.
In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. Given that situation, would you be concerned if it turned out insiders were relentlessly selling stock? It would bother me, that's for sure. It costs nothing but a moment of your time to see if we are picking up on any insider selling.