Unless you borrow money to invest, the potential losses are limited. But when you choose a business that is truly successful, you can Make more than 100%. For example, the Infinity Pharmaceuticals, Inc. (NASDAQ: INFI) The stock price has more than doubled in just one year, up 192%. Another good news is that the share price has climbed 50% in thirty days. Equally impressive, the stock is up 68% over three years, which also pleases long-term shareholders.
After a solid gain last week, it’s worth seeing if long-term returns have been boosted by improving fundamentals.
See our latest review for Infinity Pharmaceuticals
Infinity Pharmaceuticals has only recorded sales of $ 1,910,000 in the past twelve months, which is not really enough for us to consider it a proven product. So it seems that investors have focused more on what could be, than paying attention to current income (or lack thereof). It seems likely that some shareholders believe that Infinity Pharmaceuticals has the funds to invent a new product before too long.
Generally, if a business does not have a lot of income and is losing money, then it is a high risk investment. You should be aware that there is always a chance that this type of business will need to issue more shares to raise funds to continue pursuing their business plan. While some of these companies are doing very well in the long run, others are put forward by developers before they fall back to earth and go bankrupt (or be recapitalized). Of course, if you choose the right time, high risk investments like this can really pay off, as investors in Infinity Pharmaceuticals may know.
When it released its report in June 2021, Infinity Pharmaceuticals had minimal cash flow beyond all liabilities, consider its expenses: only $ 36 million to be precise. So if she hasn’t already remedied the situation, she will almost certainly have to raise more capital soon. It is a testament to the popularity of the business plan that the share price has gained 75% over the past year, despite the weak balance sheet. The image below shows how Infinity Pharmaceuticals’ balance sheet has evolved over time; if you want to see the precise values, just click on the picture.
Of course, the truth is, it’s hard to assess businesses without a lot of income or profit. However, you can check to see if any insiders have bought any shares. If they are buying a significant amount of stocks, that is certainly a good thing. Fortunately, we are able to provide you with this free insider buying (and selling) chart.
A different perspective
We are pleased to report that Infinity Pharmaceuticals shareholders received a total shareholder return of 192% over one year. This gain is better than the annual TSR over five years which is 17%. Therefore, it seems that sentiment around the company has been positive lately. At the best of times, this can portend real business momentum, implying that now may be a good time to dig deep. I find it very interesting to look at the long-term share price as an indicator of company performance. But to really understand better, we have to take other information into account as well. To this end, you should inquire about the 5 warning signs we spotted some with Infinity Pharmaceuticals (including 2 which are a little worrying).
For those who like to find winning investments this free list of growing companies with recent insider buys, might be just the ticket.
Please note that the market returns quoted in this article reflect the market-weighted average returns of stocks currently traded on US stock exchanges.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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