Introducing Cielo Waste Solutions (CNSX:CMC), The Stock That Slid 52% In The Last Year

Even the best stock pickers will make plenty of bad investments. And unfortunately for Cielo Waste Solutions Corp. (CNSX:CMC) shareholders, the stock is a lot lower today than it was a year ago. The share price is down a hefty 52% in that time. On the bright side, the stock is actually up 18% in the last three years. Furthermore, it’s down 41% in about a quarter. That’s not much fun for holders. This could be related to the recent financial results – you can catch up on the most recent data by reading our company report.

See our latest analysis for Cielo Waste Solutions

With zero revenue generated over twelve months, we don’t think that Cielo Waste Solutions has proved its business plan yet. You have to wonder why venture capitalists aren’t funding it. So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. Investors will be hoping that Cielo Waste Solutions can make progress and gain better traction for the business, before it runs low on cash.

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 companies like this go on to deliver on their plan, making good money for shareholders, many end in painful losses and eventual de-listing. It certainly is a dangerous place to invest, as Cielo Waste Solutions investors might realise.

Cielo Waste Solutions had net debt of CA$7,331,183 when it last reported in January 2019, according to our data. That makes it extremely high risk, in our view. But since the share price has dived -52% in the last year, it looks like some investors think it’s time to abandon ship, so to speak. You can click on the image below to see (in greater detail) how Cielo Waste Solutions’s cash and debt levels have changed over time.

CNSX:CMC Historical Debt, April 18th 2019
CNSX:CMC Historical Debt, April 18th 2019

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, would you be concerned if it turned out insiders were relentlessly selling stock? It would bother me, that’s for sure. You can click here to see if there are insiders selling.

A Different Perspective

The last twelve months weren’t great for Cielo Waste Solutions shares, which cost holders 52%, while the market was up about 7.2%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. Fortunately the longer term story is brighter, with total returns averaging about 5.7% per year over three years. The recent sell-off could be an opportunity if the business remains sound, so it may be worth checking the fundamental data for signs of a long-term growth trend. If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares – and the price they paid.

Cielo Waste Solutions is not the only stock that insiders are buying. 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 CA 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 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.