Investors Who Bought Crown Confectionery (KRX:264900) Shares A Year Ago Are Now Up 51%

We believe investing is smart because history shows that stock markets go higher in the long term. But if you choose that path, you're going to buy some stocks that fall short of the market. Unfortunately for shareholders, while the Crown Confectionery Co., Ltd. (KRX:264900) share price is up 51% in the last year, that falls short of the market return. Zooming out, the stock is actually down 23% in the last three years.

View our latest analysis for Crown Confectionery

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During the last year Crown Confectionery grew its earnings per share (EPS) by 50%. The similarity between the EPS growth and the 51% share price gain really stands out. This makes us think the market hasn't really changed its sentiment around the company, in the last year. It looks like the share price is responding to the EPS.

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 Crown Confectionery's key metrics by checking this interactive graph of Crown Confectionery's earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between Crown Confectionery's total shareholder return (TSR) and its share price change, which we've covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. We note that Crown Confectionery's TSR, at 56% is higher than its share price return of 51%. When you consider it hasn't been paying a dividend, this data suggests shareholders have benefitted from a spin-off, or had the opportunity to acquire attractively priced shares in a discounted capital raising.

A Different Perspective

Crown Confectionery produced a TSR of 56% over the last year. Unfortunately this falls short of the market return of around 69%. On the bright side, that's certainly better than the yearly loss of about 5% endured over the last three years, implying that the company is doing better recently. It could well be that the business is stabilizing. 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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Crown Confectionery (of which 1 is a bit unpleasant!) you should know about.

Of course Crown Confectionery may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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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