Hankook Cosmetics'(KRX:123690) Share Price Is Down 34% Over The Past Three Years.

For many investors, the main point of stock picking is to generate higher returns than the overall market. But in any portfolio, there are likely to be some stocks that fall short of that benchmark. Unfortunately, that's been the case for longer term Hankook Cosmetics Co., Ltd. (KRX:123690) shareholders, since the share price is down 34% in the last three years, falling well short of the market return of around 28%. Unhappily, the share price slid 1.2% in the last week.

See our latest analysis for Hankook Cosmetics

Given that Hankook Cosmetics didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally expect to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Over the last three years, Hankook Cosmetics' revenue dropped 15% per year. That's definitely a weaker result than most pre-profit companies report. On the face of it we'd posit the share price fall of 10% compound, over three years is well justified by the fundamental deterioration. It would probably be worth asking whether the company can fund itself to profitability. The company will need to return to revenue growth as quickly as possible, if it wants to see some enthusiasm from investors.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

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

A Different Perspective

Investors in Hankook Cosmetics had a tough year, with a total loss of 2.7%, against a market gain of about 44%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Longer term investors wouldn't be so upset, since they would have made 0.5%, each year, over five years. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Hankook Cosmetics better, we need to consider many other factors. For instance, we've identified 1 warning sign for Hankook Cosmetics that you should be aware of.

We will like Hankook Cosmetics 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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