Did You Miss Zinus' (KRX:013890) 17% Share Price Gain?

Zinus, Inc (KRX:013890) shareholders might be concerned after seeing the share price drop 14% in the last quarter. But at least the stock is up over the last year. But to be blunt its return of 17% fall short of what you could have got from an index fund (around 57%).

See our latest analysis for Zinus

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. 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 last year, Zinus actually saw its earnings per share drop 1.5%.

The mild decline in EPS may be a result of the fact that the company is more focused on other aspects of the business, right now. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

We are skeptical of the suggestion that the 1.3% dividend yield would entice buyers to the stock. However the year on year revenue growth of 26% would help. We do see some companies suppress earnings in order to accelerate revenue growth.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

If you are thinking of buying or selling Zinus stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Zinus shareholders have gained 18% for the year (even including dividends). The bad news is that's no better than the average market return, which was roughly 57%. The last three months haven't been great for shareholder returns, since the share price has trailed the market by 28% in the last three months. But a weak quarter certainly doesn't diminish the longer-term achievements of the business. It's always interesting to track share price performance over the longer term. But to understand Zinus better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Zinus (at least 2 which are significant) , and understanding them should be part of your investment process.

We will like Zinus better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

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

When trading Zinus or any other investment, use the platform considered by many to be the Professional's Gateway to the Worlds Market, Interactive Brokers. You get the lowest-cost* trading on stocks, options, futures, forex, bonds and funds worldwide 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 (at) simplywallst.com.