Some ExpreS2ion Biotech Holding (STO:EXPRS2) Shareholders Are Down 36%
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The simplest way to benefit from a rising market is to buy an index fund. Active investors aim to buy stocks that vastly outperform the market - but in the process, they risk under-performance. Unfortunately the ExpreS2ion Biotech Holding AB (publ) (STO:EXPRS2) share price slid 36% over twelve months. That contrasts poorly with the market return of 11%. Because ExpreS2ion Biotech Holding hasn't been listed for many years, the market is still learning about how the business performs. There was little comfort for shareholders in the last week as the price declined a further 3.6%.
Check out our latest analysis for ExpreS2ion Biotech Holding
ExpreS2ion Biotech Holding recorded just kr9,311,000 in revenue over the last twelve months, which isn't really enough for us to consider it to have a proven product. You have to wonder why venture capitalists aren't funding it. 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 ExpreS2ion Biotech Holding 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. 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 such companies go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt.
ExpreS2ion Biotech Holding had liabilities exceeding cash by kr2,661,000 when it last reported in March 2019, according to our data. That puts it in the highest risk category, according to our analysis. But with the share price diving 36% in the last year, it's probably fair to say that some shareholders no longer believe the company will succeed. The image below shows how ExpreS2ion Biotech Holding's balance sheet has changed over time; if you want to see the precise values, simply click on the image.
In reality it's hard to have much certainty when valuing a business that has neither revenue or profit. Would it bother you if insiders were selling the stock? It would bother me, that's for sure. It costs nothing but a moment of your time to see if we are picking up on any insider selling.
A Different Perspective
While ExpreS2ion Biotech Holding shareholders are down 36% for the year, the market itself is up 11%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 4.0% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on SE exchanges.
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.
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. Thank you for reading.
