Saeron Automotive (KRX:075180) Shareholders Have Enjoyed A 45% Share Price Gain

Diversification is a key tool for dealing with stock price volatility. But the goal is to pick stocks that do better than average. One such company is Saeron Automotive Corporation (KRX:075180), which saw its share price increase 45% in the last year, slightly above the market return of around 44% (not including dividends). On the other hand, longer term shareholders have had a tougher run, with the stock falling 11% in three years.

Check out our latest analysis for Saeron Automotive

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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, Saeron Automotive actually saw its earnings per share drop 1,127%. This was, in part, due to extraordinary items impacting earning in the last twelve months.

So we don't think that investors are paying too much attention to EPS. Therefore, it seems likely that investors are putting more weight on metrics other than EPS, at the moment.

Saeron Automotive's revenue actually dropped 12% over last year. So using a snapshot of key business metrics doesn't give us a good picture of why the market is bidding up the stock.

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

If you are thinking of buying or selling Saeron Automotive stock, you should check out this FREE detailed report on its balance sheet.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Saeron Automotive, it has a TSR of 48% for the last year. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

Saeron Automotive provided a TSR of 48% over the year (including dividends). That's fairly close to the broader market return. To take a positive view, the gain is pleasing, and it sure beats annualized TSR loss of 1.7%, which was endured over half a decade. While 'turnarounds seldom turn' there are green shoots for Saeron Automotive. It's always interesting to track share price performance over the longer term. But to understand Saeron Automotive better, we need to consider many other factors. Even so, be aware that Saeron Automotive is showing 3 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

But note: Saeron Automotive may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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

When trading Saeron Automotive or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.