If You Had Bought Korea Electronic Certification Authority (KOSDAQ:041460) Shares A Year Ago You'd Have Earned 59% Returns

These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But you can significantly boost your returns by picking above-average stocks. For example, the Korea Electronic Certification Authority, Inc. (KOSDAQ:041460) share price is up 59% in the last year, clearly besting the market return of around 29% (not including dividends). If it can keep that out-performance up over the long term, investors will do very well! Having said that, the longer term returns aren't so impressive, with stock gaining just 9.4% in three years.

See our latest analysis for Korea Electronic Certification Authority

While Korea Electronic Certification Authority made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

In the last year Korea Electronic Certification Authority saw its revenue grow by 11%. That's not great considering the company is losing money. In keeping with the revenue growth, the share price gained 59% in that time. That's not a standout result, but it is solid - much like the level of revenue growth. It could be worth keeping an eye on this one, especially if growth accelerates.

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

Take a more thorough look at Korea Electronic Certification Authority's financial health with this free report on its balance sheet.

A Different Perspective

It's nice to see that Korea Electronic Certification Authority shareholders have received a total shareholder return of 61% over the last year. That's including the dividend. Notably the five-year annualised TSR loss of 3% 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. 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. Even so, be aware that Korea Electronic Certification Authority is showing 2 warning signs in our investment analysis , and 1 of those is a bit concerning...

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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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