Reflecting on DONG AH TIRE & RUBBER's (KRX:282690) Share Price Returns Over The Last Year

Investors can approximate the average market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. For example, the DONG AH TIRE & RUBBER CO., LTD. (KRX:282690) share price is down 21% in the last year. That's well below the market return of 25%. We wouldn't rush to judgement on DONG AH TIRE & RUBBER because we don't have a long term history to look at. It's up 1.2% in the last seven days.

Check out our latest analysis for DONG AH TIRE & RUBBER

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Unfortunately DONG AH TIRE & RUBBER reported an EPS drop of 14% for the last year. The share price decline of 21% is actually more than the EPS drop. This suggests the EPS fall has made some shareholders are more nervous about the business. The less favorable sentiment is reflected in its current P/E ratio of 7.52.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

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

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, DONG AH TIRE & RUBBER's TSR for the last year was -18%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

While DONG AH TIRE & RUBBER shareholders are down 18% for the year (even including dividends), the market itself is up 25%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. With the stock down 5.6% over the last three months, the market doesn't seem to believe that the company has solved all its problems. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 3 warning signs we've spotted with DONG AH TIRE & RUBBER (including 1 which is is significant) .

But note: DONG AH TIRE & RUBBER 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.

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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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