HS Valve (KOSDAQ:039610) shareholders YoY returns are lagging the company's 71% one-year earnings growth

The HS Valve Co., Ltd (KOSDAQ:039610) share price has had a bad week, falling 16%. But that doesn't change the fact that the returns over the last year have been pleasing. To wit, it had solidly beat the market, up 20%.

Although HS Valve has shed ₩16b from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

See our latest analysis for HS Valve

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 HS Valve grew its earnings per share (EPS) by 71%. It's fair to say that the share price gain of 20% did not keep pace with the EPS growth. Therefore, it seems the market isn't as excited about HS Valve as it was before. This could be an opportunity. This cautious sentiment is reflected in its (fairly low) P/E ratio of 11.55.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

This free interactive report on HS Valve's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that HS Valve has rewarded shareholders with a total shareholder return of 20% in the last twelve months. Notably the five-year annualised TSR loss of 1.3% per year compares very unfavourably with the recent share price performance. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that HS Valve is showing 3 warning signs in our investment analysis , and 2 of those make us uncomfortable...

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 South Korean exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.

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