Reflecting on Maeil Dairies' (KOSDAQ:267980) Share Price Returns Over The Last Year

Investors can approximate the average market return by buying an index fund. While individual stocks can be big winners, plenty more fail to generate satisfactory returns. Investors in Maeil Dairies Co., Ltd. (KOSDAQ:267980) have tasted that bitter downside in the last year, as the share price dropped 20%. That falls noticeably short of the market return of around 25%. Longer term investors have fared much better, since the share price is up 1.4% in three years.

See our latest analysis for Maeil Dairies

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Unfortunately Maeil Dairies reported an EPS drop of 7.7% for the last year. This reduction in EPS is not as bad as the 20% share price fall. So it seems the market was too confident about the business, a year ago. The P/E ratio of 9.08 also points to the negative market sentiment.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

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

A Different Perspective

Maeil Dairies shareholders are down 19% for the year, (even including dividends), but the broader market is up 25%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Investors are up over three years, booking 1.3% per year, much better than the more recent returns. The recent sell-off could be an opportunity if the business remains sound, so it may be worth checking the fundamental data for signs of a long-term growth trend. 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 be aware of the 2 warning signs we've spotted with Maeil Dairies .

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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