Nasdaq
華爾街日報JINSUNG T.E.C's (KOSDAQ:036890) 119% YoY earnings expansion surpassed the shareholder returns over the past year
On average, over time, stock markets tend to rise higher. This makes investing attractive. But if when you choose to buy stocks, some of them will be below average performers. For example, the JINSUNG T.E.C., Inc. (KOSDAQ:036890), share price is up over the last year, but its gain of 60% trails the market return. However, the longer term returns haven't been so impressive, with the stock up just 2.9% in the last three years.
Since it's been a strong week for JINSUNG T.E.C shareholders, let's have a look at trend of the longer term fundamentals.
To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.
During the last year JINSUNG T.E.C grew its earnings per share (EPS) by 119%. This EPS growth is significantly higher than the 60% increase in the share price. Therefore, it seems the market isn't as excited about JINSUNG T.E.C as it was before. This could be an opportunity. This cautious sentiment is reflected in its (fairly low) P/E ratio of 8.38.
The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).
Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.
What About Dividends?
It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for JINSUNG T.E.C the TSR over the last 1 year was 63%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.
A Different Perspective
JINSUNG T.E.C provided a TSR of 63% over the year (including dividends). That's fairly close to the broader market return. That gain looks pretty satisfying, and it is even better than the five-year TSR of 7% per year. It is possible that management foresight will bring growth well into the future, even if the share price slows down. 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. For example, we've discovered 2 warning signs for JINSUNG T.E.C (1 shouldn't be ignored!) that you should be aware of before investing here.
For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on South Korean exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.