Can You Imagine How Jubilant Taihan Electric Wire's (KRX:001440) Shareholders Feel About Its 145% Share Price Gain?

When you buy shares in a company, there is always a risk that the price drops to zero. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Taihan Electric Wire Co., Ltd. (KRX:001440) share price has soared 145% in the last year. Most would be very happy with that, especially in just one year! It's also good to see the share price up 87% over the last quarter. And shareholders have also done well over the long term, with an increase of 36% in the last three years.

View our latest analysis for Taihan Electric Wire

Because Taihan Electric Wire made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last year Taihan Electric Wire saw its revenue grow by 4.1%. That's not a very high growth rate considering it doesn't make profits. So we wouldn't have expected the share price to rise by 145%. We're happy that investors have made money, though we wonder if the increase will be sustained. We're not so sure that revenue growth is driving the market optimism about the stock.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

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

It's nice to see that Taihan Electric Wire shareholders have received a total shareholder return of 145% over the last year. Notably the five-year annualised TSR loss of 7% 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. It's always interesting to track share price performance over the longer term. But to understand Taihan Electric Wire better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Taihan Electric Wire , and understanding them should be part of your investment process.

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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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