CTK Cosmetics (KOSDAQ:260930) Shareholders Have Enjoyed A 88% Share Price Gain

One way to deal with stock volatility is to ensure you have a properly diverse portfolio. But the goal is to pick stocks that do better than average. One such company is CTK Cosmetics Co., Ltd (KOSDAQ:260930), which saw its share price increase 88% in the last year, slightly above the market return of around 84% (not including dividends). In contrast, the longer term returns are negative, since the share price is 51% lower than it was three years ago.

See our latest analysis for CTK Cosmetics

Given that CTK Cosmetics only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.

In the last year CTK Cosmetics saw its revenue shrink by 4.3%. The stock is up 88% in that time, a fine performance given the revenue drop. To us that means that there isn't a lot of correlation between the past revenue performance and the share price, but a closer look at analyst forecasts and the bottom line may well explain a lot.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

If you are thinking of buying or selling CTK Cosmetics stock, you should check out this FREE detailed report on its balance sheet.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of CTK Cosmetics, it has a TSR of 91% for the last year. That exceeds its share price return that we previously mentioned. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

While the market return was 90% in the last year, CTK Cosmetics returned 91% to shareholders. Given the three-year TSR of 14% per year, shareholders probably aren't too concerned by the recent gain! It could well be that the business is getting back on track. It's always interesting to track share price performance over the longer term. But to understand CTK Cosmetics better, we need to consider many other factors. Take risks, for example - CTK Cosmetics has 5 warning signs (and 1 which is concerning) we think you should know about.

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.

If you decide to trade CTK Cosmetics, use the lowest-cost* platform that is rated #1 Overall by Barron’s, Interactive Brokers. Trade stocks, options, futures, forex, bonds and funds on 135 markets, all from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.