Announcing: SK Innovation (KRX:096770) Stock Increased An Energizing 185% In The Last Year

By
Simply Wall St
Published
May 06, 2021
KOSE:A096770
Source: Shutterstock

When you buy shares in a company, there is always a risk that the price drops to zero. But if you pick the right stock, you can make a lot more than 100%. For example, the SK Innovation Co., Ltd. (KRX:096770) share price has soared 185% in the last year. Most would be very happy with that, especially in just one year! It's also up 23% in about a month. And shareholders have also done well over the long term, with an increase of 39% in the last three years.

See our latest analysis for SK Innovation

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.

Over the last twelve months SK Innovation went from profitable to unprofitable. While some may see this as temporary, we're a skeptical bunch, and so we're a little surprised to see the share price go up. We might get a clue to explain the share price move by looking to other metrics.

SK Innovation's revenue actually dropped 31% over last year. So the fundamental metrics don't provide an obvious explanation for the share price gain.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

earnings-and-revenue-growth
KOSE:A096770 Earnings and Revenue Growth May 7th 2021

SK Innovation is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. Given we have quite a good number of analyst forecasts, it might be well worth checking out this free chart depicting consensus estimates.

What about the Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between SK Innovation's total shareholder return (TSR) and its share price return. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. SK Innovation's TSR of 187% for the year exceeded its share price return, because it has paid dividends.

A Different Perspective

We're pleased to report that SK Innovation shareholders have received a total shareholder return of 187% over one year. That's better than the annualised return of 16% 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. It's always interesting to track share price performance over the longer term. But to understand SK Innovation better, we need to consider many other factors. Even so, be aware that SK Innovation is showing 2 warning signs in our investment analysis , you should know about...

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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