Stock Analysis

If You Had Bought Ever Supreme Bio Technology (GTSM:6712) Shares A Year Ago You'd Have Earned 24% Returns

TPEX:6712
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The simplest way to invest in stocks is to buy exchange traded funds. But investors can boost returns by picking market-beating companies to own shares in. To wit, the Ever Supreme Bio Technology Co., Ltd (GTSM:6712) share price is 24% higher than it was a year ago, much better than the market return of around 16% (not including dividends) in the same period. That's a solid performance by our standards! Ever Supreme Bio Technology hasn't been listed for long, so it's still not clear if it is a long term winner.

Check out our latest analysis for Ever Supreme Bio Technology

With just NT$53,309,000 worth of revenue in twelve months, we don't think the market considers Ever Supreme Bio Technology to have proven its business plan. 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 Ever Supreme Bio Technology has the funding to invent a new product before too long.

We think companies that have neither significant revenues nor profits are pretty high risk. 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 such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt.

Ever Supreme Bio Technology had cash in excess of all liabilities of NT$335m when it last reported (September 2020). 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. Given the share price has increased by a solid 145% in the last year , it's fair to say investors remain excited about the future, despite the potential need for cash. The image below shows how Ever Supreme Bio Technology's balance sheet has changed over time; if you want to see the precise values, simply click on the image.

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GTSM:6712 Debt to Equity History November 18th 2020

It can be extremely risky to invest in a company that doesn't even have revenue. There's no way to know its value easily. However you can take a look at whether insiders have been buying up shares. It's usually a positive if they have, as it may indicate they see value in the stock. You can click here to see if there are insiders buying.

A Different Perspective

Ever Supreme Bio Technology shareholders should be happy with the total gain of 24% over the last twelve months. A substantial portion of that gain has come in the last three months, with the stock up 7.1% in that time. This suggests the company is continuing to win over new investors. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 2 warning signs for Ever Supreme Bio Technology you should be aware of, and 1 of them is a bit concerning.

We will like Ever Supreme Bio Technology 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 TW exchanges.

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Valuation is complex, but we're helping make it simple.

Find out whether Ever Supreme Bio Technology is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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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