HD Korea Shipbuilding & Offshore Engineering (KRX:009540) shareholder returns have been impressive, earning 105% in 5 years

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. Long term HD Korea Shipbuilding & Offshore Engineering Co., Ltd. (KRX:009540) shareholders would be well aware of this, since the stock is up 105% in five years. It's also good to see the share price up 54% over the last quarter.

Since the stock has added ₩1.2t to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

See our latest analysis for HD Korea Shipbuilding & Offshore Engineering

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 five years of share price growth, HD Korea Shipbuilding & Offshore Engineering 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.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

We know that HD Korea Shipbuilding & Offshore Engineering has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at HD Korea Shipbuilding & Offshore Engineering's financial health with this free report on its balance sheet.

A Different Perspective

We're pleased to report that HD Korea Shipbuilding & Offshore Engineering shareholders have received a total shareholder return of 65% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 15% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. Is HD Korea Shipbuilding & Offshore Engineering cheap compared to other companies? These 3 valuation measures might help you decide.

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 South Korean exchanges.

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

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