Announcing: Golden Pursuit Resources (CVE:GDP) Stock Increased An Energizing 214% In The Last Five Years

The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Golden Pursuit Resources Ltd. (CVE:GDP) share price has soared 214% in the last half decade. Most would be very happy with that. Also pleasing for shareholders was the 120% gain in the last three months. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report.

See our latest analysis for Golden Pursuit Resources

Golden Pursuit Resources recorded just CA$10,000 in revenue over the last twelve months, which isn't really enough for us to consider it to have a proven product. 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. For example, investors may be hoping that Golden Pursuit Resources finds some valuable resources, before it runs out of money.

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 do very well over the long term, others become hyped up by promoters before eventually falling back down to earth, and going bankrupt (or being recapitalized). Some Golden Pursuit Resources 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.

Golden Pursuit Resources had liabilities exceeding cash by CA$654k when it last reported in December 2019, according to our data. That puts it in the highest risk category, according to our analysis. So we're surprised to see the stock up 71% per year, over 5 years , but we're happy for holders. Investors must really like its potential. You can see in the image below, how Golden Pursuit Resources'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. 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. Luckily we are in a position to provide you with this free chart of insider buying (and selling).

A Different Perspective

We're pleased to report that Golden Pursuit Resources shareholders have received a total shareholder return of 38% over one year. That gain is better than the annual TSR over five years, which is 26%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Golden Pursuit Resources better, we need to consider many other factors. Case in point: We've spotted 7 warning signs for Golden Pursuit Resources you should be aware of, and 4 of them are concerning.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.