Pum-Tech Korea (KOSDAQ:251970) Shareholders Have Enjoyed A 12% Share Price Gain

We believe investing is smart because history shows that stock markets go higher in the long term. But if you choose that path, you're going to buy some stocks that fall short of the market. Unfortunately for shareholders, while the Pum-Tech Korea Co., Ltd (KOSDAQ:251970) share price is up 12% in the last year, that falls short of the market return. Pum-Tech Korea hasn't been listed for long, so it's still not clear if it is a long term winner.

Check out our latest analysis for Pum-Tech Korea

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

Over the last twelve months, Pum-Tech Korea actually shrank its EPS by 1.2%.

Sometimes companies will sacrifice EPS in the short term for longer term gains; and in that case we may be able to find other positives. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

We are skeptical of the suggestion that the 1.8% dividend yield would entice buyers to the stock. However the year on year revenue growth of 25% would help. Many businesses do go through a phase where they have to forgo some profits to drive business development, and sometimes its for the best.

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

Take a more thorough look at Pum-Tech Korea's financial health with this free report on its balance sheet.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, Pum-Tech Korea's TSR for the last year was 15%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

We're happy to report that Pum-Tech Korea are up 15% over the year (even including dividends). The bad news is that's no better than the average market return, which was roughly 47%. However, that falls short of the 23% gain it has made, for shareholders, in the last three months. The very recent increase in the share price could be evidence that the narrative is changing for the better due to fundamental improvements. It's always interesting to track share price performance over the longer term. But to understand Pum-Tech Korea better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Pum-Tech Korea (of which 1 makes us a bit uncomfortable!) you should know about.

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 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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