The SoftOx Solutions (OB:SOFTOX-ME) Share Price Has Soared 333%, Delighting Many Shareholders
While stock picking isn't easy, for those willing to persist and learn, it is possible to buy shares in great companies, and generate wonderful returns. When an investor finds a multi-bagger (a stock that goes up over 200%), it makes a big difference to their portfolio. For example, the SoftOx Solutions AS (OB:SOFTOX-ME) share price is up a whopping 333% in the last year, a handsome return in a single year. Also pleasing for shareholders was the 263% 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. We'll need to follow SoftOx Solutions for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.
See our latest analysis for SoftOx Solutions
With just kr4,216,000 worth of revenue in twelve months, we don't think the market considers SoftOx Solutions 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. Investors will be hoping that SoftOx Solutions can make progress and gain better traction for the business, before it runs low on cash.
Companies that lack both meaningful revenue and profits are usually considered high risk. 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 companies like this go on to deliver on their plan, making good money for shareholders, many end in painful losses and eventual de-listing. SoftOx Solutions has already given some investors a taste of the sweet gains that high risk investing can generate, if your timing is right.
SoftOx Solutions has plenty of cash in the bank, with cash in excess of all liabilities sitting at kr59m, when it last reported (December 2019). This gives management the flexibility to drive business growth, without worrying too much about cash reserves. And with the share price up 55% in the last year , the market is focussed on that blue sky potential. You can see in the image below, how SoftOx Solutions'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. Given that situation, many of the best investors like to check if insiders have been buying 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
It's nice to see that SoftOx Solutions shareholders have gained 333% over the last year. And the share price momentum remains respectable, with a gain of 263% in the last three months. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 6 warning signs with SoftOx Solutions (at least 3 which can't be ignored) , and understanding them should be part of your investment process.
But note: SoftOx Solutions may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on NO 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.
