Amidst increasing losses, Investors bid up Tedea Technological Development and Automation (TLV:TEDE) 11% this past week

It is a pleasure to report that the Tedea Technological Development and Automation Ltd. (TLV:TEDE) is up 49% in the last quarter. But that doesn't change the reality of under-performance over the last twelve months. In fact, the price has declined 35% in a year, falling short of the returns you could get by investing in an index fund.

On a more encouraging note the company has added ₪6.6m to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.

Check out our latest analysis for Tedea Technological Development and Automation

With just ₪151,000 worth of revenue in twelve months, we don't think the market considers Tedea Technological Development and Automation to have proven its business plan. You have to wonder why venture capitalists aren't funding it. So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. It seems likely some shareholders believe that Tedea Technological Development and Automation will significantly advance the business plan before too long.

Companies that lack both meaningful revenue and profits are usually considered high risk. There is almost always a chance they will need to raise more capital, and their progress - and share price - will dictate how dilutive that is 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 Tedea Technological Development and Automation had ₪8.5m more in total liabilities than it had cash, when it last reported in December 2022. That makes it extremely high risk, in our view. But since the share price has dived 35% in the last year , it looks like some investors think it's time to abandon ship, so to speak. You can see in the image below, how Tedea Technological Development and Automation's cash levels have changed over time (click to see the values).

Of course, the truth is that it is hard to value companies without much revenue or profit. Would it bother you if insiders were selling the stock? I'd like that just about as much as I like to drink milk and fruit juice mixed together. It only takes a moment for you to check whether we have identified any insider sales recently.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Tedea Technological Development and Automation the TSR over the last 1 year was -25%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

While the broader market lost about 15% in the twelve months, Tedea Technological Development and Automation shareholders did even worse, losing 25% (even including dividends). Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. On the bright side, long term shareholders have made money, with a gain of 4% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Tedea Technological Development and Automation better, we need to consider many other factors. For example, we've discovered 4 warning signs for Tedea Technological Development and Automation (3 are significant!) that you should be aware of before investing here.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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