What Type Of Returns Would HJ Magnolia Yongpyong Hotel & Resort's(KRX:070960) Shareholders Have Earned If They Purchased Their SharesThree Years Ago?

For many investors, the main point of stock picking is to generate higher returns than the overall market. But if you try your hand at stock picking, your risk returning less than the market. Unfortunately, that's been the case for longer term HJ Magnolia Yongpyong Hotel & Resort (KRX:070960) shareholders, since the share price is down 48% in the last three years, falling well short of the market return of around 36%. And over the last year the share price fell 20%, so we doubt many shareholders are delighted.

View our latest analysis for HJ Magnolia Yongpyong Hotel & Resort

Given that HJ Magnolia Yongpyong Hotel & Resort didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last three years HJ Magnolia Yongpyong Hotel & Resort saw its revenue shrink by 22% per year. That's definitely a weaker result than most pre-profit companies report. With revenue in decline, the share price decline of 14% per year is hardly undeserved. The key question now is whether the company has the capacity to fund itself to profitability, without more cash. Of course, it is possible for businesses to bounce back from a revenue drop - but we'd want to see that before getting interested.

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

If you are thinking of buying or selling HJ Magnolia Yongpyong Hotel & Resort stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Over the last year, HJ Magnolia Yongpyong Hotel & Resort shareholders took a loss of 20%, including dividends. In contrast the market gained about 43%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. Shareholders have lost 14% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. We would be wary of buying into a company with unsolved problems, although some investors will buy into struggling stocks if they believe the price is sufficiently attractive. 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. To that end, you should learn about the 3 warning signs we've spotted with HJ Magnolia Yongpyong Hotel & Resort (including 1 which can't be ignored) .

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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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