Reflecting on Namyang Dairy Products' (KRX:003920) Share Price Returns Over The Last Five Years

Statistically speaking, long term investing is a profitable endeavour. But no-one is immune from buying too high. For example the Namyang Dairy Products Co., Ltd (KRX:003920) share price dropped 61% over five years. That's an unpleasant experience for long term holders. And it's not just long term holders hurting, because the stock is down 36% in the last year. On the other hand, we note it's up 9.1% in about a month. However, this may be a matter of broader market optimism, since stocks are up 14% in the same time.

See our latest analysis for Namyang Dairy Products

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 five years Namyang Dairy Products' earnings per share dropped significantly, falling to a loss, with the share price also lower. At present it's hard to make valid comparisons between EPS and the share price. However, we can say we'd expect to see a falling share price in this scenario.

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

Dive deeper into Namyang Dairy Products' key metrics by checking this interactive graph of Namyang Dairy Products's earnings, revenue and cash flow.

A Different Perspective

Namyang Dairy Products shareholders are down 36% for the year (even including dividends), but the market itself is up 36%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 10% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Namyang Dairy Products , and understanding them should be part of your investment process.

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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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