Edge FoundryLtd (KOSDAQ:105550) shareholders are up 20% this past week, but still in the red over the last year

Edge Foundry Co.,Ltd (KOSDAQ:105550) shareholders should be happy to see the share price up 20% in the last week. But that doesn't change the reality of under-performance over the last twelve months. The cold reality is that the stock has dropped 32% in one year, under-performing the market.

On a more encouraging note the company has added ₩24b to its market cap in just the last 7 days, so let's see if we can determine what's driven the one-year loss for shareholders.

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While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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 Edge FoundryLtd grew its earnings per share, moving from a loss to a profit.

We're surprised that the share price is lower given that improvement. If the company can sustain the earnings growth, this might be an inflection point for the business, which would make right now a really interesting time to study it more closely.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

A Different Perspective

While the broader market gained around 70% in the last year, Edge FoundryLtd shareholders lost 32%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 1.8% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand Edge FoundryLtd better, we need to consider many other factors. To that end, you should learn about the 4 warning signs we've spotted with Edge FoundryLtd (including 1 which makes us a bit uncomfortable) .

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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.