Recent 12% pullback isn't enough to hurt long-term Agabang&Company (KOSDAQ:013990) shareholders, they're still up 50% over 5 years

Agabang&Company (KOSDAQ:013990) shareholders have seen the share price descend 14% over the month. On the bright side the share price is up over the last half decade. However we are not very impressed because the share price is only up 50%, less than the market return of 68%.

Although Agabang&Company has shed ₩18b from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

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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. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the five years of share price growth, Agabang&Company moved from a loss to profitability. That would generally be considered a positive, so we'd hope to see the share price to rise. Since the company was unprofitable five years ago, but not three years ago, it's worth taking a look at the returns in the last three years, too. In fact, the Agabang&Company stock price is 1.3% lower in the last three years. Meanwhile, EPS is up 0.2% per year. So there seems to be a mismatch between the positive EPS growth and the change in the share price, which is down -0.4% per year.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

This free interactive report on Agabang&Company's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

While the broader market lost about 8.2% in the twelve months, Agabang&Company shareholders did even worse, losing 9.1%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. On the bright side, long term shareholders have made money, with a gain of 8% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Agabang&Company , and understanding them should be part of your investment process.

Of course Agabang&Company may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.