Cosmo Chemical (KRX:005420) shareholders are still up 355% over 5 years despite pulling back 9.2% in the past week

When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But on a lighter note, a good company can see its share price rise well over 100%. For instance, the price of Cosmo Chemical Co., Ltd. (KRX:005420) stock is up an impressive 279% over the last five years. But it's down 9.2% in the last week. But note that the broader market is down 2.8% since last week, and this may have impacted Cosmo Chemical's share price.

Since the long term performance has been good but there's been a recent pullback of 9.2%, let's check if the fundamentals match the share price.

View our latest analysis for Cosmo Chemical

Given that Cosmo Chemical 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last 5 years Cosmo Chemical saw its revenue grow at 17% per year. Even measured against other revenue-focussed companies, that's a good result. Meanwhile, its share price performance certainly reflects the strong growth, given the share price grew at 31% per year, compound, during the period. This suggests the market has well and truly recognized the progress the business has made. To our minds that makes Cosmo Chemical worth investigating - it may have its best days ahead.

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

Take a more thorough look at Cosmo Chemical's financial health with this free report on its balance sheet.

What About The Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between Cosmo Chemical's total shareholder return (TSR) and its share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Cosmo Chemical hasn't been paying dividends, but its TSR of 355% exceeds its share price return of 279%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.

A Different Perspective

Cosmo Chemical shareholders are down 40% for the year, but the market itself is up 7.6%. 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 35%, 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 Cosmo Chemical better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Cosmo Chemical (of which 1 is concerning!) you should know about.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can 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.