We think that it's fair to say that the possibility of finding fantastic multi-year winners is what motivates many investors. Mistakes are inevitable, but a single top stock pick can cover any losses, and so much more. Take, for example, the Nordtelekom Távközlési Szolgáltató Nyrt. (BUSE:NORDTELEKOM) share price, which skyrocketed 510% over three years. In the last week the share price is up 4.8%.
Anyone who held for that rewarding ride would probably be keen to talk about it.
We don't think Nordtelekom Távközlési Szolgáltató Nyrt's revenue of Ft37,576,000 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 Nordtelekom Távközlési Szolgáltató Nyrt can make progress and gain better traction for the business, before it runs low on cash.
As a general rule, if a company doesn't have much revenue, and it loses money, then it is a high risk investment. There is usually a significant chance that they will need more money for business development, putting them at the mercy of capital markets. So the share price itself impacts the value of the shares (as it determines the cost of capital). While some such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt. Some Nordtelekom Távközlési Szolgáltató Nyrt 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.
Our data indicates that Nordtelekom Távközlési Szolgáltató Nyrt had Ft166m more in total liabilities than it had cash, when it last reported in June 2019. That makes it extremely high risk, in our view. So the fact that the stock is up 43% 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 click on the image below to see (in greater detail) how Nordtelekom Távközlési Szolgáltató Nyrt's cash levels have changed over time. Look at the image below to see how Nordtelekom Távközlési Szolgáltató Nyrt's cash levels have changed over time.
Of course, the truth is that it is hard to value companies without much revenue or profit. Given that situation, many of the best investors like to check if insiders have been buying shares. It's usually a positive if they have, as it may indicate they see value in the stock. Luckily we are in a position to provide you with this free chart of insider buying (and selling).
A Different Perspective
We're pleased to report that Nordtelekom Távközlési Szolgáltató Nyrt shareholders have received a total shareholder return of 29% over one year. However, that falls short of the 41% TSR per annum it has made for shareholders, each year, over five years. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.
We will like Nordtelekom Távközlési Szolgáltató Nyrt 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 HU 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 firstname.lastname@example.org. 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.
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