The one-year decline in earnings for Appeninn Vagyonkezelo Holding Nyilvánosan Muködo Részvénytársaság BUSE:APPENINN) isn't encouraging, but shareholders are still up 147% over that period

It's been a soft week for Appeninn Vagyonkezelo Holding Nyilvánosan Muködo Részvénytársaság (BUSE:APPENINN) shares, which are down 11%. But that doesn't change the fact that the returns over the last year have been very strong. Like an eagle, the share price soared 147% in that time. So it may be that the share price is simply cooling off after a strong rise. More important, going forward, is how the business itself is going.

While the stock has fallen 11% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

Check out our latest analysis for Appeninn Vagyonkezelo Holding Nyilvánosan Muködo Részvénytársaság

We don't think Appeninn Vagyonkezelo Holding Nyilvánosan Muködo Részvénytársaság's revenue of €13,018,777 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). Investors will be hoping that Appeninn Vagyonkezelo Holding Nyilvánosan Muködo Részvénytársaság can make progress and gain better traction for the business, before it runs low on cash.

We think companies that have neither significant revenues nor profits are pretty high risk. There is usually a significant chance that they will need more money for business development, putting them at the mercy of capital markets to raise equity. So the share price itself impacts the value of the shares (as it determines the cost of capital). 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 Appeninn Vagyonkezelo Holding Nyilvánosan Muködo Részvénytársaság 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.

Appeninn Vagyonkezelo Holding Nyilvánosan Muködo Részvénytársaság had liabilities exceeding cash by €95m when it last reported in June 2023, according to our data. That makes it extremely high risk, in our view. So we're surprised to see the stock up 85% in the last year , but we're happy for holders. Investors must really like its potential. You can click on the image below to see (in greater detail) how Appeninn Vagyonkezelo Holding Nyilvánosan Muködo Részvénytársaság's cash levels have changed over time.

In reality it's hard to have much certainty when valuing a business that has neither 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. You can click here to see if there are insiders buying.

A Different Perspective

It's nice to see that Appeninn Vagyonkezelo Holding Nyilvánosan Muködo Részvénytársaság shareholders have received a total shareholder return of 147% over the last year. That certainly beats the loss of about 1.6% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand Appeninn Vagyonkezelo Holding Nyilvánosan Muködo Részvénytársaság better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 6 warning signs for Appeninn Vagyonkezelo Holding Nyilvánosan Muködo Részvénytársaság (of which 1 is concerning!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.