If You Had Bought Ray (KOSDAQ:228670) Shares A Year Ago You'd Have Earned 11% Returns

On average, over time, stock markets tend to rise higher. This makes investing attractive. But if when you choose to buy stocks, some of them will be below average performers. For example, the Ray Co., Ltd. (KOSDAQ:228670), share price is up over the last year, but its gain of 11% trails the market return. Ray hasn't been listed for long, so it's still not clear if it is a long term winner.

View our latest analysis for Ray

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.

During the last year, Ray actually saw its earnings per share drop 36%.

This means it's unlikely the market is judging the company based on earnings growth. Therefore, it seems likely that investors are putting more weight on metrics other than EPS, at the moment.

Ray's revenue actually dropped 18% over last year. So the fundamental metrics don't provide an obvious explanation for the share price gain.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

We're happy to report that Ray are up 11% over the year. While it's always nice to make a profit on the stock market, we do note that the TSR was no better than the broader market return of about 31%. The stock trailed the market by 5.3% in that time, testament to the power of passive investing. But a weak quarter certainly doesn't diminish the longer-term achievements of the business. 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. To that end, you should be aware of the 1 warning sign we've spotted with Ray .

We will like Ray better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider 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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