Jayjun Cosmetic's (KRX:025620) Shareholders Are Down 87% On Their Shares

As an investor, mistakes are inevitable. But really bad investments should be rare. So spare a thought for the long term shareholders of Jayjun Cosmetic Co., Ltd. (KRX:025620); the share price is down a whopping 87% in the last three years. That would certainly shake our confidence in the decision to own the stock. Shareholders have had an even rougher run lately, with the share price down 13% in the last 90 days.

We really feel for shareholders in this scenario. It's a good reminder of the importance of diversification, and it's worth keeping in mind there's more to life than money, anyway.

Check out our latest analysis for Jayjun Cosmetic

Because Jayjun Cosmetic made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

In the last three years Jayjun Cosmetic saw its revenue shrink by 49% per year. That means its revenue trend is very weak compared to other loss making companies. The swift share price decline at an annual compound rate of 23%, reflects this weak fundamental performance. Never forget that loss making companies with falling revenue can and do cause losses for everyday investors. There is a good reason that investors often describe buying a sharply falling stock price as 'trying to catch a falling knife'. Think about it.

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

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

A Different Perspective

Jayjun Cosmetic shareholders gained a total return of 22% during the year. Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 9% endured over half a decade. So this might be a sign the business has turned its fortunes around. It's always interesting to track share price performance over the longer term. But to understand Jayjun Cosmetic better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Jayjun Cosmetic you should be aware of, and 2 of them shouldn't be ignored.

But note: Jayjun Cosmetic 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 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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