Stock Analysis

Paseco (KOSDAQ:037070) Has Gifted Shareholders With A Fantastic 230% Total Return On Their Investment

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KOSDAQ:A037070
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The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on a lighter note, a good company can see its share price rise well over 100%. Long term Paseco Co. Ltd (KOSDAQ:037070) shareholders would be well aware of this, since the stock is up 183% in five years. On top of that, the share price is up 12% in about a quarter. But this could be related to the strong market, which is up 23% in the last three months.

Check out our latest analysis for Paseco

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Over half a decade, Paseco managed to grow its earnings per share at 19% a year. So the EPS growth rate is rather close to the annualized share price gain of 23% per year. Therefore one could conclude that sentiment towards the shares hasn't morphed very much. Indeed, it would appear the share price is reacting to the EPS.

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

earnings-per-share-growth
KOSDAQ:A037070 Earnings Per Share Growth January 5th 2021

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Paseco's total shareholder return (TSR) and its share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Dividends have been really beneficial for Paseco shareholders, and that cash payout contributed to why its TSR of 230%, over the last 5 years, is better than the share price return.

A Different Perspective

It's good to see that Paseco has rewarded shareholders with a total shareholder return of 71% in the last twelve months. That gain is better than the annual TSR over five years, which is 27%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. Before forming an opinion on Paseco you might want to consider these 3 valuation metrics.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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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About KOSDAQ:A037070

Paseco

Paseco Co. Ltd manufactures and sells water appliances, heaters, and commercial and home appliances primarily in Korea.

Adequate balance sheet with poor track record.

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