These days it’s easy to simply buy an index fund, and your returns should (roughly) match the market. But you can significantly boost your returns by picking above-average stocks. To wit, the BLIRT S.A. (WSE:BLR) share price is 68% higher than it was a year ago, much better than the market return of around -2.5% (not including dividends) in the same period. So that should have shareholders smiling. Zooming out, the stock is actually down 40% in the last three years.
BLIRT recorded just zł10,087,009 in revenue over the last twelve months, which isn’t really enough for us to consider it to have a proven product. So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). It seems likely some shareholders believe that BLIRT has the funding to invent a new product 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. You should be aware that there is always a chance that this sort of company will need to issue more shares to raise money to continue pursuing its business plan. 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. Of course, if you time it right, high risk investments like this can really pay off, as BLIRT investors might know.
BLIRT had cash in excess of all liabilities of zł595k when it last reported (June 2019). That’s not too bad but management may have to think about raising capital or taking on debt, unless the company is close to breaking even. With the share price up 114% in the last year , the market is seems hopeful about the potential, despite the cash burn. You can see in the image below, how BLIRT’s cash levels have changed over time (click to see the values). The image below shows how BLIRT’s balance sheet has 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. If they are buying a significant amount of shares, that’s certainly a good thing. You can click here to see if there are insiders buying.
A Different Perspective
It’s nice to see that BLIRT shareholders have received a total shareholder return of 68% over the last year. That certainly beats the loss of about 9.2% per year over the last half decade. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. Before forming an opinion on BLIRT you might want to consider these 3 valuation metrics.
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 PL exchanges.
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If you spot an error that warrants correction, please contact the editor at email@example.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. Thank you for reading.