CLIO CosmeticsLtd's (KOSDAQ:237880) Shareholders Are Down 47% On Their Shares

While not a mind-blowing move, it is good to see that the CLIO Cosmetics Co.,Ltd (KOSDAQ:237880) share price has gained 16% in the last three months. But that doesn't change the fact that the returns over the last three years have been less than pleasing. After all, the share price is down 47% in the last three years, significantly under-performing the market.

View our latest analysis for CLIO CosmeticsLtd

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.

During the three years that the share price fell, CLIO CosmeticsLtd's earnings per share (EPS) dropped by 31% each year. In comparison the 19% compound annual share price decline isn't as bad as the EPS drop-off. So the market may not be too worried about the EPS figure, at the moment -- or it may have previously priced some of the drop in. This positive sentiment is also reflected in the generous P/E ratio of 70.27.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

A Different Perspective

The last twelve months weren't great for CLIO CosmeticsLtd shares, which cost holders 25%, including dividends, while the market was up about 47%. Of course the long term matters more than the short term, and even great stocks will sometimes have a poor year. Shareholders have lost 13% per year over the last three years, so the share price drop has become steeper, over the last year; a potential symptom of as yet unsolved challenges. Although Baron Rothschild famously said to "buy when there's blood in the streets, even if the blood is your own", he also focusses on high quality stocks with solid prospects. 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. Take risks, for example - CLIO CosmeticsLtd has 1 warning sign we think you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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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