Antipa Minerals Limited (ASX:AZY) shareholders might be concerned after seeing the share price drop 21% in the last quarter. But over the last three years returns have been decent. In fact the stock is up 44%, which is better than the market return of 43%.
Antipa Minerals recorded just AU$57,810 in revenue over the last twelve months, which isn’t really enough for us to consider it to have a proven product. 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. It seems likely some shareholders believe that Antipa Minerals will find or develop a valuable new mine before too long.
As a general rule, if a company doesn’t have much revenue, and it loses money, then it is a high risk investment. The is usually a significant chance that they will need more money for business development, putting them at the mercy of capital markets. So the share price itself impacts the value of the shares (as it determines the cost of capital). 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 June 2018, Antipa Minerals had net cash of AU$7.3m. That’s not too bad but management may have to think about raising capital or taking on debt, unless the company is close to breaking even. Given the share price has increased by a solid 13% per year, over 3 years, its fair to say investors remain excited about the future, despite the potential need for cash. The image belows shows how Antipa Minerals’s balance sheet has changed over time; if you want to see the precise values, simply click on the image.
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. You can click here to see if there are insiders buying.
What about the Total Shareholder Return (TSR)?
We’ve already covered Antipa Minerals’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. Antipa Minerals hasn’t been paying dividends, but its TSR of 44% exceeds its share price return of 44%, implying it has raised capital at a discount, which is deemed to provide value to shareholders.
A Different Perspective
We’re pleased to report that Antipa Minerals shareholders have received a total shareholder return of 28% over one year. There’s no doubt those recent returns are much better than the TSR loss of 0.7% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. If you would like to research Antipa Minerals in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.
For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on AU exchanges.
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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. Thank you for reading.