Stock Analysis

Is Ever Supreme Bio Technology's (GTSM:6712) Share Price Gain Of 126% Well Earned?

TPEX:6712
Source: Shutterstock

When you buy shares in a company, there is always a risk that the price drops to zero. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Ever Supreme Bio Technology Co., Ltd (GTSM:6712) share price has soared 126% return in just a single year. It's also good to see the share price up 74% over the last quarter. Ever Supreme Bio Technology hasn't been listed for long, so it's still not clear if it is a long term winner.

View 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 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 Ever Supreme Bio Technology 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 such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt. Some Ever Supreme Bio Technology 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.

When it last reported its balance sheet in September 2020, Ever Supreme Bio Technology had cash in excess of all liabilities of NT$335m. While that's nothing to panic about, there is some possibility the company will raise more capital, especially if profits are not imminent. Given the share price has increased by a solid 91% 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.

debt-equity-history-analysis
GTSM:6712 Debt to Equity History March 12th 2021

In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. One thing you can do is check if company insiders are buying shares. It's often positive if so, assuming the buying is sustained and meaningful. You can click here to see if there are insiders buying.

A Different Perspective

Ever Supreme Bio Technology boasts a total shareholder return of 126% for the last year. And the share price momentum remains respectable, with a gain of 74% in the last three months. This suggests the company is continuing to win over new investors. It's always interesting to track share price performance over the longer term. But to understand Ever Supreme Bio Technology better, we need to consider many other factors. For instance, we've identified 4 warning signs for Ever Supreme Bio Technology (1 is a bit unpleasant) that you should be aware of.

Of course Ever Supreme Bio Technology may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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

If you’re looking to trade Ever Supreme Bio Technology, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted


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.

View the Free Analysis

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.
*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020


Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.