Can You Imagine How Soosan Heavy Industries' (KRX:017550) Shareholders Feel About The 98% Share Price Increase?

Soosan Heavy Industries Co., Ltd. (KRX:017550) shareholders might be concerned after seeing the share price drop 12% in the last week. But over three years, the returns would have left most investors smiling After all, the share price is up a market-beating 98% in that time.

View our latest analysis for Soosan Heavy Industries

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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 three years of share price growth, Soosan Heavy Industries actually saw its earnings per share (EPS) drop 52% per year. In this instance, recent extraordinary items impacted the earnings.

Thus, it seems unlikely that the market is focussed on EPS growth at the moment. Given this situation, it makes sense to look at other metrics too.

The modest 0.3% dividend yield is unlikely to be propping up the share price. It may well be that Soosan Heavy Industries revenue growth rate of 19% over three years has convinced shareholders to believe in a brighter future. In that case, the company may be sacrificing current earnings per share to drive growth, and maybe shareholder's faith in better days ahead will be rewarded.

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

This free interactive report on Soosan Heavy Industries' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that Soosan Heavy Industries has rewarded shareholders with a total shareholder return of 96% in the last twelve months. That's including the dividend. That gain is better than the annual TSR over five years, which is 4%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. Even so, be aware that Soosan Heavy Industries is showing 3 warning signs in our investment analysis , you should know about...

But note: Soosan Heavy Industries may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on KR exchanges.

If you decide to trade Soosan Heavy Industries, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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