Stock Analysis

The Otani KogyoLtd (TYO:5939) Share Price Has Gained 194%, So Why Not Pay It Some Attention?

TSE:5939
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The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on the bright side, you can make far more than 100% on a really good stock. Long term Otani Kogyo Co.,Ltd. (TYO:5939) shareholders would be well aware of this, since the stock is up 194% in five years. It's also up 57% in about a month.

Check out our latest analysis for Otani KogyoLtd

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During five years of share price growth, Otani KogyoLtd achieved compound earnings per share (EPS) growth of 0.4% per year. This EPS growth is slower than the share price growth of 24% per year, over the same period. This suggests that market participants hold the company in higher regard, these days. And that's hardly shocking given the track record of growth.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

earnings-per-share-growth
JASDAQ:5939 Earnings Per Share Growth February 8th 2021

Dive deeper into Otani KogyoLtd's key metrics by checking this interactive graph of Otani KogyoLtd's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Otani KogyoLtd's total shareholder return (TSR) and its share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Otani KogyoLtd's TSR of 206% for the 5 years exceeded its share price return, because it has paid dividends.

A Different Perspective

Investors in Otani KogyoLtd had a tough year, with a total loss of 13%, against a market gain of about 12%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 25% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Otani KogyoLtd better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for Otani KogyoLtd you should be aware of, and 1 of them is significant.

For those who like to find winning investments this free list of growing 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 JP exchanges.

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Valuation is complex, but we're helping make it simple.

Find out whether Otani KogyoLtd is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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. 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.
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