Can You Imagine How Sungdo Engineering & Construction's (KOSDAQ:037350) Shareholders Feel About The 43% Share Price Increase?

There's no doubt that investing in the stock market is a truly brilliant way to build wealth. But if when you choose to buy stocks, some of them will be below average performers. Unfortunately for shareholders, while the Sungdo Engineering & Construction Co., Ltd. (KOSDAQ:037350) share price is up 43% in the last year, that falls short of the market return. On the other hand, longer term shareholders have had a tougher run, with the stock falling 20% in three years.

View our latest analysis for Sungdo Engineering & Construction

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.

During the last year Sungdo Engineering & Construction saw its earnings per share (EPS) drop below zero. While some may see this as temporary, we're a skeptical bunch, and so we're a little surprised to see the share price go up. It may be that the company has done well on other metrics.

We are skeptical of the suggestion that the 1.0% dividend yield would entice buyers to the stock. Sungdo Engineering & Construction's revenue actually dropped 5.0% over last year. So the fundamental metrics don't provide an obvious explanation for the share price gain.

You can see below how earnings and revenue have changed over time (discover 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.

A Different Perspective

Sungdo Engineering & Construction provided a TSR of 44% over the year (including dividends). That's fairly close to the broader market return. That gain looks pretty satisfying, and it is even better than the five-year TSR of 5% per year. It is possible that management foresight will bring growth well into the future, even if the share price slows down. It's always interesting to track share price performance over the longer term. But to understand Sungdo Engineering & Construction better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Sungdo Engineering & Construction (of which 1 is a bit unpleasant!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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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