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Some New Talisman Gold Mines Limited (NZSE:NTL) shareholders are probably rather concerned to see the share price fall 38% over the last three months. But over three years, the returns would have left most investors smiling After all, the share price is up a market-beating 60% in that time.
View our latest analysis for New Talisman Gold Mines
New Talisman Gold Mines recorded just NZ$86,734 in revenue over the last twelve months, which isn't really enough for us to consider it to have a proven product. So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. For example, investors may be hoping that New Talisman Gold Mines finds some valuable resources, before it runs out of money.
Companies that lack both meaningful revenue and profits are usually considered high risk. 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 do very well over the long term, others become hyped up by promoters before eventually falling back down to earth, and going bankrupt (or being recapitalized). New Talisman Gold Mines has already given some investors a taste of the sweet gains that high risk investing can generate, if your timing is right.
New Talisman Gold Mines had cash in excess of all liabilities of just NZ$789k when it last reported (March 2019). 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 17% per year, over 3 years, despite the weak balance sheet. You can see in the image below, how New Talisman Gold Mines'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. However you can take a look at whether insiders have been buying up shares. It's usually a positive if they have, as it may indicate they see value in the stock. Luckily we are in a position to provide you with this free chart of insider buying (and selling).
What about the Total Shareholder Return (TSR)?
We've already covered New Talisman Gold Mines's share price action, but we should also mention its total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. We note that New Talisman Gold Mines's TSR, at 60% is higher than its share price return of 60%. When you consider it hasn't been paying a dividend, this data suggests shareholders have benefitted from a spin-off, or had the opportunity to acquire attractively priced shares in a discounted capital raising.