Stock Analysis

Shareholders Of Cuckoo Holdings (KRX:192400) Have Received 42% On Their Investment

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KOSE:A192400
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It is doubtless a positive to see that the Cuckoo Holdings Co., Ltd. (KRX:192400) share price has gained some 38% in the last three months. But if you look at the last five years the returns have not been good. In fact, the share price is down 45%, which falls well short of the return you could get by buying an index fund.

Check out our latest analysis for Cuckoo Holdings

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 unfortunate half decade during which the share price slipped, Cuckoo Holdings actually saw its earnings per share (EPS) improve by 13% per year. Given the share price reaction, one might suspect that EPS is not a good guide to the business performance during the period (perhaps due to a one-off loss or gain). Alternatively, growth expectations may have been unreasonable in the past.

Because of the sharp contrast between the EPS growth rate and the share price growth, we're inclined to look to other metrics to understand the changing market sentiment around the stock.

It could be that the revenue decline of 4.0% per year is viewed as evidence that Cuckoo Holdings is shrinking. That could explain the weak share price.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

earnings-and-revenue-growth
KOSE:A192400 Earnings and Revenue Growth March 5th 2021

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

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Cuckoo Holdings, it has a TSR of 42% for the last 5 years. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

Cuckoo Holdings shareholders are up 44% for the year (even including dividends). But that was short of the market average. The silver lining is that the gain was actually better than the average annual return of 7% per year over five year. This could indicate that the company is winning over new investors, as it pursues its strategy. It's always interesting to track share price performance over the longer term. But to understand Cuckoo Holdings better, we need to consider many other factors. For example, we've discovered 2 warning signs for Cuckoo Holdings that you should be aware of before investing here.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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 KOSE:A192400

Cuckoo Holdings

Cuckoo Holdings Co., Ltd., together with its subsidiaries, manufactures and sells kitchen appliances.

Flawless balance sheet average dividend payer.

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