One of the frustrations of investing is when a stock goes down. But no-one can make money on every call, especially in a declining market. While the Winshear Gold Corp. (CVE:WINS) share price is down 61% in the last three years, the total return to shareholders (which includes dividends) was 217%. That's better than the market which returned 27% over the last three years. The last week also saw the share price slip down another 88%.

With the stock having lost 88% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.

View our latest analysis for Winshear Gold

Winshear Gold hasn't yet reported any revenue, so it's as much a business idea as an actual business. We can't help wondering why it's publicly listed so early in its journey. Are venture capitalists not interested? So it seems that the investors focused more on what could be, than paying attention to the current revenues (or lack thereof). For example, investors may be hoping that Winshear Gold finds some valuable resources, before it runs out of money.

Companies that lack both meaningful revenue and profits are usually considered 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 go on to make revenue, profits, and generate value, others get hyped up by hopeful naifs before eventually going bankrupt. Some Winshear Gold investors have already had a taste of the bitterness stocks like this can leave in the mouth.

When it reported in September 2023 Winshear Gold had minimal cash in excess of all liabilities consider its expenditure: just CA$155k to be specific. So if it hasn't remedied the situation already, it will almost certainly have to raise more capital soon. With that in mind, you can understand why the share price dropped 17% per year, over 3 years. You can click on the image below to see (in greater detail) how Winshear Gold's cash levels have changed over time.

It can be extremely risky to invest in a company that doesn't even have revenue. There's no way to know its value easily. Would it bother you if insiders were selling the stock? I would feel more nervous about the company if that were so. It costs nothing but a moment of your time to see if we are picking up on any insider selling.

What About The Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Winshear Gold's total shareholder return (TSR) and its share price return. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. We note that Winshear Gold's TSR, at 217% is higher than its share price return of -61%. When you consider it hasn't been paying a dividend, this data suggests shareholders have benefitted from a spin-off, or had the opportunity to acquire attractively priced shares in a discounted capital raising.