Investors Who Bought CTK Cosmetics (KOSDAQ:260930) Shares A Year Ago Are Now Up 13%

It hasn't been the best quarter for CTK Cosmetics Co., Ltd (KOSDAQ:260930) shareholders, since the share price has fallen 11% in that time. Looking on the brighter side, the stock is actually up over twelve months. However, its return of 13% does fall short of the market return of, 27%.

See our latest analysis for CTK Cosmetics

We don't think that CTK Cosmetics' modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. 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.

CTK Cosmetics actually shrunk its revenue over the last year, with a reduction of 20%. The lacklustre gain of 13% over twelve months, is not a bad result given the falling revenue. Generally we're pretty unenthusiastic about loss making stocks that are not growing revenue.

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

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. We note that for CTK Cosmetics the TSR over the last year was 15%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

CTK Cosmetics shareholders have gained 15% for the year (even including dividends). 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 27%. The stock trailed the market by 20% 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. 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. Even so, be aware that CTK Cosmetics is showing 4 warning signs in our investment analysis , and 1 of those is significant...

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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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