Did Business Growth Power Handok Clean Tech's (KOSDAQ:256150) Share Price Gain of 151%?

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But when you pick a company that is really flourishing, you can make more than 100%. For example, the Handok Clean Tech Co., Ltd. (KOSDAQ:256150) share price had more than doubled in just one year - up 151%. Also pleasing for shareholders was the 23% gain in the last three months. Note that businesses generally develop over the long term, so the returns over the last year might not reflect a long term trend.

See our latest analysis for Handok Clean Tech

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.

During the last year Handok Clean Tech grew its earnings per share (EPS) by 5.7%. The share price gain of 151% certainly outpaced the EPS growth. This indicates that the market is now more optimistic about the stock.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

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)?

Investors should note that there's a difference between Handok Clean Tech's total shareholder return (TSR) and its share price change, which we've covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Handok Clean Tech hasn't been paying dividends, but its TSR of 154% exceeds its share price return of 151%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.

A Different Perspective

Handok Clean Tech boasts a total shareholder return of 154% for the last year. That's better than the more recent three month gain of 23%, implying that share price has plateaued recently. It seems likely the market is waiting on fundamental developments with the business before pushing the share price higher (or lower). It's always interesting to track share price performance over the longer term. But to understand Handok Clean Tech better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Handok Clean Tech you should be aware of, and 1 of them doesn't sit too well with us.

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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