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If you love investing in stocks you're bound to buy some losers. But long term Immutep Limited (ASX:IMM) shareholders have had a particularly rough ride in the last three year. Sadly for them, the share price is down 52% in that time.
Now let's have a look at the company's fundamentals, and see if the long term shareholder return has matched the performance of the underlying business.
View our latest analysis for Immutep
Immutep recorded just AU$3,841,877 in revenue over the last twelve months, which isn't really enough for us to consider it to have a proven product. We can't help wondering why it's publicly listed so early in its journey. Are venture capitalists not interested? So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. For example, they may be hoping that Immutep comes up with a great new product, before it runs out of money.
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. It certainly is a dangerous place to invest, as Immutep investors might realise.
When it last reported its balance sheet in June 2024, Immutep could boast a strong position, with cash in excess of all liabilities of AU$170m. This gives management the flexibility to drive business growth, without worrying too much about cash reserves. But with the share price diving 15% per year, over 3 years , it could be that the price was previously too hyped up. You can see in the image below, how Immutep's cash levels have changed over time (click to see the values).
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? I'd like that just about as much as I like to drink milk and fruit juice mixed together. You can click here to see if there are insiders selling.
A Different Perspective
While the broader market gained around 21% in the last year, Immutep shareholders lost 2.4%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 1.2% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Immutep better, we need to consider many other factors. For instance, we've identified 3 warning signs for Immutep that you should be aware of.