While it may not be enough for some shareholders, we think it is good to see the Silver Elephant Mining Corp. (TSE:ELEF) share price up 26% in a single quarter. We really hope anyone holding through that price crash has a diversified portfolio. Even when you lose money, you don't have to lose the lesson.

After losing 15% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

See our latest analysis for Silver Elephant Mining

With zero revenue generated over twelve months, we don't think that Silver Elephant Mining has proved its business plan yet. You have to wonder why venture capitalists aren't funding it. So it seems shareholders are too busy dreaming about the progress to come than dwelling on the current (lack of) revenue. For example, they may be hoping that Silver Elephant Mining finds fossil fuels with an exploration program, before it runs out of money.

As a general rule, if a company doesn't have much revenue, and it loses money, then it is a high risk investment. There was already a significant chance that they would need more money for business development, and indeed they recently put themselves at the mercy of capital markets and raised equity. So the share price itself impacts the value of the shares (as it determines the cost of capital). 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. Silver Elephant Mining has already given some investors a taste of the bitter losses that high risk investing can cause.

Our data indicates that Silver Elephant Mining had more in total liabilities than it had cash, when it last reported. That put it in the highest risk category, according to our analysis. But with the share price diving 13% per year, over 5 years , it's probably fair to say that some shareholders no longer believe the company will succeed or they are worried about dilution with the recent cash injection. The image below shows how Silver Elephant Mining's balance sheet has changed over time; if you want to see the precise values, simply click on the image.

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've already covered Silver Elephant Mining's share price action, but we should also mention its total shareholder return (TSR). Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Silver Elephant Mining hasn't been paying dividends, but its TSR of 896% exceeds its share price return of -85%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.