While some are satisfied with an index fund, active investors aim to find truly magnificent investments on the stock market. When you buy and hold the right company, the returns can make a huge difference to both you and your family. For example, the River iGaming p.l.c. (OB:RIVER) share price rocketed moonwards 809% in just one year. It's also good to see the share price up 72% over the last quarter. This could be related to the recent financial results, released recently - you can catch up on the most recent data by reading our company report. However, the longer term returns haven't been so impressive, with the stock up just 18% in the last three years.
Anyone who held for that rewarding ride would probably be keen to talk about it.
With just €7,456,079 worth of revenue in twelve months, we don't think the market considers River iGaming to have proven its business plan. 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. It seems likely some shareholders believe that River iGaming 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. 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 companies like this go on to deliver on their plan, making good money for shareholders, many end in painful losses and eventual de-listing. River iGaming has already given some investors a taste of the sweet gains that high risk investing can generate, if your timing is right.
Our data indicates that River iGaming had €21m more in total liabilities than it had cash, when it last reported in December 2020. That makes it extremely high risk, in our view. So the fact that the stock is up 31% in the last year 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 River iGaming'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. Given that situation, many of the best investors like to check if insiders have been buying shares. If they are buying a significant amount of shares, that's certainly a good thing. Luckily we are in a position to provide you with this free chart of insider buying (and selling).
A Different Perspective
Pleasingly, River iGaming's total shareholder return last year was 809%. That gain actually surpasses the 6% TSR it generated (per year) over three years. Given the track record of solid returns over varying time frames, it might be worth putting River iGaming on your watchlist. 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 River iGaming (including 3 which are potentially serious) .
If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on NO exchanges.
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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. 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.
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