KUMHO Engineering & Construction (KRX:002990) shareholders are up 12% this past week, but still in the red over the last five years

It's nice to see the KUMHO Engineering & Construction Co., Ltd. (KRX:002990) share price up 12% in a week. But don't envy holders -- looking back over 5 years the returns have been really bad. Indeed, the share price is down 64% in the period. So we're not so sure if the recent bounce should be celebrated. We'd err towards caution given the long term under-performance.

On a more encouraging note the company has added ₩14b to its market cap in just the last 7 days, so let's see if we can determine what's driven the five-year loss for shareholders.

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Given that KUMHO Engineering & Construction didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally hope to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Over five years, KUMHO Engineering & Construction grew its revenue at 2.4% per year. That's not a very high growth rate considering it doesn't make profits. This lacklustre growth has no doubt fueled the loss of 10% per year, in that time. We'd want to see proof that future revenue growth is likely to be significantly stronger before getting too interested in KUMHO Engineering & Construction. When a stock falls hard like this, some investors like to add the company to a watchlist (in case the business recovers, longer term).

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

If you are thinking of buying or selling KUMHO Engineering & Construction stock, you should check out this FREE detailed report on its balance sheet.

What About The Total Shareholder Return (TSR)?

We've already covered KUMHO Engineering & Construction'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. KUMHO Engineering & Construction's TSR of was a loss of 57% for the 5 years. That wasn't as bad as its share price return, because it has paid dividends.

A Different Perspective

KUMHO Engineering & Construction provided a TSR of 31% over the last twelve months. Unfortunately this falls short of the market return. But at least that's still a gain! Over five years the TSR has been a reduction of 9% per year, over five years. It could well be that the business is stabilizing. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For instance, we've identified 1 warning sign for KUMHO Engineering & Construction that you should be aware of.

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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 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.