OPTUS Pharmaceutical's (KOSDAQ:131030) one-year earnings growth trails the notable shareholder returns

If you want to compound wealth in the stock market, you can do so by buying an index fund. But if you pick the right individual stocks, you could make more than that. For example, the OPTUS Pharmaceutical Co., Ltd. (KOSDAQ:131030) share price is up 44% in the last 1 year, clearly besting the market return of around 0.8% (not including dividends). So that should have shareholders smiling. The longer term returns have not been as good, with the stock price only 2.0% higher than it was three years ago.

The past week has proven to be lucrative for OPTUS Pharmaceutical investors, so let's see if fundamentals drove the company's one-year performance.

Check out our latest analysis for OPTUS Pharmaceutical

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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 OPTUS Pharmaceutical grew its earnings per share (EPS) by 38%. This EPS growth is reasonably close to the 44% increase in the share price. So this implies that investor expectations of the company have remained pretty steady. We don't think its coincidental that the share price is growing at a similar rate to the earnings per share.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

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

What About The Total Shareholder Return (TSR)?

Investors should note that there's a difference between OPTUS Pharmaceutical's total shareholder return (TSR) and its share price change, which we've covered above. 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. We note that OPTUS Pharmaceutical's TSR, at 47% is higher than its share price return of 44%. 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

It's good to see that OPTUS Pharmaceutical has rewarded shareholders with a total shareholder return of 47% in the last twelve months. That gain is better than the annual TSR over five years, which is 2%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand OPTUS Pharmaceutical better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for OPTUS Pharmaceutical (of which 1 is potentially serious!) you should know about.

But note: OPTUS Pharmaceutical may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on South Korean exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.