If You Had Bought Upco International (CSE:UPCO) Stock A Year Ago, You Could Pocket A 14% Gain Today

If you want to compound wealth in the stock market, you can do so by buying an index fund. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). For example, the Upco International Inc. (CSE:UPCO) share price is up 14% in the last year, clearly besting the market decline of around 17% (not including dividends). So that should have shareholders smiling. We'll need to follow Upco International for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

See our latest analysis for Upco International

Upco International recorded just US$623,695 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. Investors will be hoping that Upco International 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. We can see that they needed to raise more capital, and took that step recently despite the fact that it would have been dilutive to current holders. While some such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt.

Our data indicates that Upco International had more in total liabilities than it had cash, when it last reported. That put it in the highest risk category, according to our analysis. So we're not surprised to see the stock up 155% in the last year , once the company took on some more capital. It's clear more than a few people believe in the potential. You can see in the image below, how Upco International's cash levels have changed over time (click to see the values).

In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. However you can take a look at whether insiders have been buying up shares. It's often positive if so, assuming the buying is sustained and meaningful. You can click here to see if there are insiders buying.

A Different Perspective

Upco International shareholders should be happy with the total gain of 14% over the last twelve months. A substantial portion of that gain has come in the last three months, with the stock up 33% in that time. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 5 warning signs we've spotted with Upco International (including 3 which is are potentially serious) .

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.

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.

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