SK Discovery (KRX:006120) Shareholders Have Enjoyed An Impressive 164% Share Price Gain

Unfortunately, investing is risky - companies can and do go bankrupt. But if you pick the right stock, you can make a lot more than 100%. For example, the SK Discovery Co., Ltd. (KRX:006120) share price has soared 164% in the last year. Most would be very happy with that, especially in just one year! And in the last month, the share price has gained -0.9%. It is also impressive that the stock is up 34% over three years, adding to the sense that it is a real winner.

See our latest analysis for SK Discovery

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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 SK Discovery grew its earnings per share (EPS) by 231%. This EPS growth is significantly higher than the 164% increase in the share price. Therefore, it seems the market isn't as excited about SK Discovery as it was before. This could be an opportunity. The caution is also evident in the lowish P/E ratio of 5.19.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

This free interactive report on SK Discovery's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of SK Discovery, it has a TSR of 167% for the last year. 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

It's good to see that SK Discovery has rewarded shareholders with a total shareholder return of 167% in the last twelve months. Of course, that includes the dividend. That's better than the annualised return of 7% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that SK Discovery is showing 1 warning sign in our investment analysis , you should know about...

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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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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