Shareholders in Lotte Non - Life Insurance (KRX:000400) have lost 19%, as stock drops 11% this past week

Investors can approximate the average market return by buying an index fund. When you buy individual stocks, you can make higher profits, but you also face the risk of under-performance. That downside risk was realized by Lotte Non - Life Insurance Co., Ltd. (KRX:000400) shareholders over the last year, as the share price declined 19%. That falls noticeably short of the market return of around 8.3%. The silver lining (for longer term investors) is that the stock is still 18% higher than it was three years ago. In the last ninety days we've seen the share price slide 23%. However, one could argue that the price has been influenced by the general market, which is down 9.6% in the same timeframe.

If the past week is anything to go by, investor sentiment for Lotte Non - Life Insurance isn't positive, so let's see if there's a mismatch between fundamentals and the share price.

See our latest analysis for Lotte Non - Life Insurance

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Lotte Non - Life Insurance managed to increase earnings per share from a loss to a profit, over the last 12 months.

When a company has just transitioned to profitability, earnings per share growth is not always the best way to look at the share price action. So it makes sense to check out some other factors.

Lotte Non - Life Insurance managed to grow revenue over the last year, which is usually a real positive. Since we can't easily explain the share price movement based on these metrics, it might be worth considering how market sentiment has changed towards the stock.

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 Lotte Non - Life Insurance stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Investors in Lotte Non - Life Insurance had a tough year, with a total loss of 19%, against a market gain of about 8.3%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Longer term investors wouldn't be so upset, since they would have made 0.7%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. 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. To that end, you should be aware of the 1 warning sign we've spotted with Lotte Non - Life Insurance .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on South Korean exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.