Investors Who Bought Antipa Minerals (ASX:AZY) Shares Five Years Ago Are Now Up 200%

The most you can lose on any stock (assuming you don’t use leverage) is 100% of your money. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. For example, the Antipa Minerals Limited (ASX:AZY) share price has soared 200% in the last half decade. Most would be very happy with that. We note the stock price is up 25% in the last seven days.

View our latest analysis for Antipa Minerals

Antipa Minerals recorded just AU$158,222 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 Antipa Minerals finds some valuable resources, before it runs out of money.

Companies that lack both meaningful revenue and profits are usually considered high risk. There is almost always a chance they will need to raise more capital, and their progress – and share price – will dictate how dilutive that is to current holders. 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). Antipa Minerals 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 2019 Antipa Minerals had minimal cash in excess of all liabilities consider its expenditure: just AU$5.7m to be specific. So if it hasn’t remedied the situation already, it will almost certainly have to raise more capital soon. Given how low on cash the it got, investors must really like its potential for the share price to be up 73% per year, over 5 years . The image below shows how Antipa Minerals’s balance sheet has changed over time; if you want to see the precise values, simply click on the image. The image below shows how Antipa Minerals’s balance sheet has changed over time; if you want to see the precise values, simply click on the image.

ASX:AZY Historical Debt, January 27th 2020
ASX:AZY Historical Debt, January 27th 2020

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. Given that situation, many of the best investors like to check if insiders have been buying 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).

A Different Perspective

Antipa Minerals shareholders are down 38% for the year, but the market itself is up 25%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn’t be so upset, since they would have made 25%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It’s always interesting to track share price performance over the longer term. But to understand Antipa Minerals better, we need to consider many other factors. For example, we’ve discovered 6 warning signs for Antipa Minerals (2 can’t be ignored!) that you should be aware of before investing here.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.