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The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on a lighter note, a good company can see its share price rise well over 100%. For example, the Soma Gold Corp. (CVE:SOMA) share price has soared 300% in the last half decade. Most would be very happy with that. Also pleasing for shareholders was the 54% gain in the last three months.
Since it's been a strong week for Soma Gold shareholders, let's have a look at trend of the longer term fundamentals.
Our free stock report includes 1 warning sign investors should be aware of before investing in Soma Gold. Read for free now.
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.
We know that Soma Gold has been profitable in the past. However, it made a loss in the last twelve months, suggesting profit may be an unreliable metric at this stage. So it might be better to look at other metrics to try to understand the share price.
In contrast revenue growth of 43% per year is probably viewed as evidence that Soma Gold is growing, a real positive. It's quite possible that management are prioritizing revenue growth over EPS growth at the moment.
The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).
If you are thinking of buying or selling Soma Gold stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
It's good to see that Soma Gold has rewarded shareholders with a total shareholder return of 38% in the last twelve months. That gain is better than the annual TSR over five years, which is 32%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Soma Gold better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Soma Gold you should be aware of.
We will like Soma Gold better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Canadian exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.