Taihan Cable & Solution (KRX:001440) shareholders are still up 172% over 5 years despite pulling back 5.1% in the past week

When you buy a stock there is always a possibility that it could drop 100%. But on the bright side, you can make far more than 100% on a really good stock. For instance, the price of Taihan Cable & Solution Co., Ltd. (KRX:001440) stock is up an impressive 123% over the last five years. It's also good to see the share price up 16% over the last quarter.

Although Taihan Cable & Solution has shed ₩134b from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

View our latest analysis for Taihan Cable & Solution

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the five years of share price growth, Taihan Cable & Solution moved from a loss to profitability. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains. Since the company was unprofitable five years ago, but not three years ago, it's worth taking a look at the returns in the last three years, too. In fact, the Taihan Cable & Solution stock price is 23% lower in the last three years. During the same period, EPS grew by 19% each year. It would appear there's a real mismatch between the increasing EPS and the share price, which has declined -8% a year for three years.

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

We know that Taihan Cable & Solution has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst revenue forecasts.

What About The Total Shareholder Return (TSR)?

Investors should note that there's a difference between Taihan Cable & Solution's total shareholder return (TSR) and its share price change, which we've covered above. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Taihan Cable & Solution hasn't been paying dividends, but its TSR of 172% exceeds its share price return of 123%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.

A Different Perspective

It's nice to see that Taihan Cable & Solution shareholders have received a total shareholder return of 39% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 22% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Taihan Cable & Solution , and understanding them should be part of your investment process.

Of course Taihan Cable & Solution may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.