Dong Ah Tire & RubberLtd's(KRX:282690) Share Price Is Down 32% Over The Past Three Years.

As an investor its worth striving to ensure your overall portfolio beats the market average. But its virtually certain that sometimes you will buy stocks that fall short of the market average returns. Unfortunately, that's been the case for longer term Dong Ah Tire & Rubber Co.,Ltd. (KRX:282690) shareholders, since the share price is down 32% in the last three years, falling well short of the market return of around 35%. The good news is that the stock is up 4.0% in the last week.

See our latest analysis for Dong Ah Tire & RubberLtd

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 three years that the share price fell, Dong Ah Tire & RubberLtd's earnings per share (EPS) dropped by 1.8% each year. This reduction in EPS is slower than the 12% annual reduction in the share price. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy. The less favorable sentiment is reflected in its current P/E ratio of 9.32.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

It might be well worthwhile taking a look at our free report on Dong Ah Tire & RubberLtd's earnings, revenue and cash flow.

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. In the case of Dong Ah Tire & RubberLtd, it has a TSR of -21% for the last 3 years. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

Dong Ah Tire & RubberLtd shareholders are up 1.7% for the year (even including dividends). It's always nice to make money but this return falls short of the market return which was about 55% for the year. On the bright side, that's certainly better than the yearly loss of about 6% endured over the last three years, implying that the company is doing better recently. We hope the turnaround in fortunes continues. It's always interesting to track share price performance over the longer term. But to understand Dong Ah Tire & RubberLtd better, we need to consider many other factors. Take risks, for example - Dong Ah Tire & RubberLtd has 2 warning signs (and 1 which is significant) we think you should know about.

We will like Dong Ah Tire & RubberLtd 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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