The NetCents Technology (CSE:NC) Share Price Is Up 124% And Shareholders Are Boasting About It

The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But in contrast you can make much more than 100% if the company does well. For instance the NetCents Technology Inc. (CSE:NC) share price is 124% higher than it was three years ago. How nice for those who held the stock! And in the last week the share price has popped 84%.

View our latest analysis for NetCents Technology

We don't think NetCents Technology's revenue of CA$198,336 is enough to establish significant demand. So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). It seems likely some shareholders believe that NetCents Technology will significantly advance the business plan 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 companies like this go on to deliver on their plan, making good money for shareholders, many end in painful losses and eventual de-listing. Some NetCents Technology investors have already had a taste of the sweet taste stocks like this can leave in the mouth, as they gain popularity and attract speculative capital.

NetCents Technology had liabilities exceeding cash by CA$4.3m when it last reported in July 2019, according to our data. That puts it in the highest risk category, according to our analysis. So the fact that the stock is up 92% per year, over 3 years shows that high risks can lead to high rewards, sometimes. It's clear more than a few people believe in the potential. You can see in the image below, how NetCents Technology's cash levels have changed over time (click to see the values). The image below shows how NetCents Technology'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. For example, we've discovered 7 warning signs for NetCents Technology (of which 3 are major) which any shareholder or potential investor should be aware of.

A Different Perspective

Over the last year, NetCents Technology shareholders took a loss of 45%. In contrast the market gained about 14%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. Investors are up over three years, booking 31% per year, much better than the more recent returns. 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. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.

We will like NetCents Technology better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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