Sungchang Enterprise Holdings (KRX:000180) adds ₩11b to market cap in the past 7 days, though investors from three years ago are still down 25%

While not a mind-blowing move, it is good to see that the Sungchang Enterprise Holdings Limited (KRX:000180) share price has gained 24% in the last three months. But that doesn't change the fact that the returns over the last three years have been less than pleasing. Truth be told the share price declined 25% in three years and that return, Dear Reader, falls short of what you could have got from passive investing with an index fund.

The recent uptick of 10% could be a positive sign of things to come, so let's take a look at historical fundamentals.

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Because Sungchang Enterprise Holdings 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 desire strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

In the last three years Sungchang Enterprise Holdings saw its revenue shrink by 17% per year. That means its revenue trend is very weak compared to other loss making companies. With revenue in decline, the share price decline of 8% per year is hardly undeserved. It would probably be worth asking whether the company can fund itself to profitability. Of course, it is possible for businesses to bounce back from a revenue drop - but we'd want to see that before getting interested.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

This free interactive report on Sungchang Enterprise Holdings' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

While the broader market gained around 4.3% in the last year, Sungchang Enterprise Holdings shareholders lost 15%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 2% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand Sungchang Enterprise Holdings better, we need to consider many other factors. For instance, we've identified 2 warning signs for Sungchang Enterprise Holdings (1 is concerning) that you should be aware of.

We will like Sungchang Enterprise Holdings better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) 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 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.