Dongwon Metal's (KRX:018500) Stock Price Has Reduced 49% In The Past Five Years

Dongwon Metal Co., Ltd. (KRX:018500) shareholders will doubtless be very grateful to see the share price up 74% in the last quarter. But if you look at the last five years the returns have not been good. In fact, the share price is down 49%, which falls well short of the return you could get by buying an index fund.

View our latest analysis for Dongwon Metal

Given that Dongwon Metal didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last five years Dongwon Metal saw its revenue shrink by 1.3% per year. While far from catastrophic that is not good. The share price decline at a rate of 8% per year is disappointing. But it doesn't surprise given the falling revenue. Without profits, its hard to see how shareholders win if the revenue keeps falling.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between Dongwon Metal's total shareholder return (TSR) and its share price change, which we've covered above. 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. Dividends have been really beneficial for Dongwon Metal shareholders, and that cash payout explains why its total shareholder loss of 42%, over the last 5 years, isn't as bad as the share price return.

A Different Perspective

Dongwon Metal shareholders gained a total return of 32% during the year. But that was short of the market average. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 7% endured over half a decade. It could well be that the business is stabilizing. 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. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Dongwon Metal (of which 1 is a bit unpleasant!) you should know about.

We will like Dongwon Metal better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on KR 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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