Stock Analysis

Woowon Development (KOSDAQ:046940) Shareholders Have Enjoyed A 54% Share Price Gain

KOSDAQ:A046940
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One simple way to benefit from the stock market is to buy an index fund. But if you pick the right individual stocks, you could make more than that. Just take a look at Woowon Development Co., Ltd. (KOSDAQ:046940), which is up 54%, over three years, soundly beating the market return of 1.9% (not including dividends).

View our latest analysis for Woowon Development

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

During three years of share price growth, Woowon Development achieved compound earnings per share growth of 48% per year. This EPS growth is higher than the 15% average annual increase in the share price. So one could reasonably conclude that the market has cooled on the stock. We'd venture the lowish P/E ratio of 5.65 also reflects the negative sentiment around the stock.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

earnings-per-share-growth
KOSDAQ:A046940 Earnings Per Share Growth November 17th 2020

Dive deeper into Woowon Development's key metrics by checking this interactive graph of Woowon Development's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

We've already covered Woowon Development's share price action, but we should also mention its total shareholder return (TSR). The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Woowon Development hasn't been paying dividends, but its TSR of 62% exceeds its share price return of 54%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.

A Different Perspective

Woowon Development shareholders are down 16% for the year, but the market itself is up 22%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 5%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Woowon Development better, we need to consider many other factors. Even so, be aware that Woowon Development is showing 4 warning signs in our investment analysis , and 2 of those are concerning...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will 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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