If You Had Bought Sung Kwang BendLtd's (KOSDAQ:014620) Shares A Year Ago You Would Be Down 27%

Sung Kwang Bend Co.,Ltd. (KOSDAQ:014620) shareholders should be happy to see the share price up 15% in the last quarter. But in truth the last year hasn't been good for the share price. In fact the stock is down 27% in the last year, well below the market return.

View our latest analysis for Sung Kwang BendLtd

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.

Even though the Sung Kwang BendLtd share price is down over the year, its EPS actually improved. It could be that the share price was previously over-hyped.

It's surprising to see the share price fall so much, despite the improved EPS. But we might find some different metrics explain the share price movements better.

Given the yield is quite low, at 1.4%, we doubt the dividend can shed much light on the share price. On the other hand, we're certainly perturbed by the 5.4% decline in Sung Kwang BendLtd's revenue. Many investors see falling revenue as a likely precursor to lower earnings, so this could well explain the weak share price.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

It is of course excellent to see how Sung Kwang BendLtd has grown profits over the years, but the future is more important for shareholders. This free interactive report on Sung Kwang BendLtd's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Sung Kwang BendLtd shareholders are down 26% for the year (even including dividends), but the market itself is up 37%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 1.5% 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 Sung Kwang BendLtd better, we need to consider many other factors. Even so, be aware that Sung Kwang BendLtd is showing 1 warning sign in our investment analysis , you should know about...

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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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