If You Had Bought Kotobukiya (TYO:7809) Stock A Year Ago, You Could Pocket A 45% Gain Today

On average, over time, stock markets tend to rise higher. This makes investing attractive. But if you choose that path, you're going to buy some stocks that fall short of the market. Unfortunately for shareholders, while the Kotobukiya Co., Ltd. (TYO:7809) share price is up 45% in the last year, that falls short of the market return. Unfortunately the longer term returns are not so good, with the stock falling 25% in the last three years.

Check out our latest analysis for Kotobukiya

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During the last year Kotobukiya saw its earnings per share (EPS) increase strongly. While that particular rate of growth is unlikely to be sustained for long, it is still remarkable. So we'd expect to see the share price higher. We're real advocates of letting inflection points like this guide our research as stock pickers.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

It might be well worthwhile taking a look at our free report on Kotobukiya's earnings, revenue and cash flow.

A Different Perspective

Kotobukiya shareholders are up 46% for the year. While you don't go broke making a profit, this return was actually lower than the average market return of about 60%. The silver lining is that the recent rise is far preferable to the annual loss of 7% that shareholders have suffered over the last three years. We hope the turnaround in fortunes continues. 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 3 warning signs for Kotobukiya (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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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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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