Investors are selling off Northern Vertex Mining (CVE:NEE), lack of profits no doubt contribute to shareholders one-year loss

By
Simply Wall St
Published
August 12, 2021
TSXV:ELVT
Source: Shutterstock

Taking the occasional loss comes part and parcel with investing on the stock market. Unfortunately, shareholders of Northern Vertex Mining Corp. (CVE:NEE) have suffered share price declines over the last year. To wit the share price is down 51% in that time. Longer term shareholders haven't suffered as badly, since the stock is down a comparatively less painful 11% in three years. Furthermore, it's down 22% in about a quarter. That's not much fun for holders.

Since Northern Vertex Mining has shed US$13m from its value in the past 7 days, let's see if the longer term decline has been driven by the business' economics.

View our latest analysis for Northern Vertex Mining

Northern Vertex Mining isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Northern Vertex Mining grew its revenue by 125% over the last year. That's a strong result which is better than most other loss making companies. In contrast the share price is down 51% over twelve months. Yes, the market can be a fickle mistress. This could mean hype has come out of the stock because the bottom line is concerning investors. We'd definitely consider it a positive if the company is trending towards profitability. If you can see that happening, then perhaps consider adding this stock to your watchlist.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth
TSXV:NEE Earnings and Revenue Growth August 13th 2021

Take a more thorough look at Northern Vertex Mining's financial health with this free report on its balance sheet.

A Different Perspective

Investors in Northern Vertex Mining had a tough year, with a total loss of 51%, against a market gain of about 31%. 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. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 6% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 4 warning signs for Northern Vertex Mining you should be aware of, and 2 of them shouldn't be ignored.

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.

When trading stocks or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted


Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.