The Global Vanadium (ASX:GLV) Share Price Is Up 200% And Shareholders Are Boasting About It

The last three months have been tough on Global Vanadium Limited (ASX:GLV) shareholders, who have seen the share price decline a rather worrying 33%. But in three years the returns have been great. In three years the stock price has launched 200% higher: a great result. To some, the recent share price pullback wouldn't be surprising after such a good run. If the business can perform well for years to come, then the recent drop could be an opportunity.

View our latest analysis for Global Vanadium

With just AU$1,342 worth of revenue in twelve months, we don't think the market considers Global Vanadium to have proven its business plan. So it seems that the investors more focused on would could be, than paying attention to the current revenues (or lack thereof). It seems likely some shareholders believe that Global Vanadium will discover or develop fossil fuel 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. 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. Of course, if you time it right, high risk investments like this can really pay off, as Global Vanadium investors might know.

When it reported in December 2018 Global Vanadium had minimal net cash consider its expenditure: just AU$435k to be specific. So if it has not already moved to replenish reserves, we think the near-term chances of a capital raising event are pretty high. Given how low on cash the it got, investors must really like its potential for the share price to be up 44% per year, over 3 years. You can click on the image below to see (in greater detail) how Global Vanadium's cash and debt levels have changed over time.

Of course, the truth is that it is hard to value companies without much revenue or profit. Given that situation, many of the best investors like to check if insiders have been buying shares. It's often positive if so, assuming the buying is sustained and meaningful. Luckily we are in a position to provide you with this freechart of insider buying (and selling).

A Different Perspective

Global Vanadium shareholders are down 14% for the year, but the market itself is up 11%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 8.4%, 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. Before spending more time on Global Vanadium it might be wise to click here to see if insiders have been buying or selling shares.

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

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 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. Thank you for reading.