OCI Company Ltd. (KRX:010060) shareholders should be happy to see the share price up 11% in the last month. But that doesn't help the fact that the three year return is less impressive. In fact, the share price is down 40% in the last three years, falling well short of the market return.
See our latest analysis for OCI
OCI isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.
In the last three years OCI saw its revenue shrink by 17% per year. That means its revenue trend is very weak compared to other loss making companies. On the face of it we'd posit the share price fall of 12% compound, over three years is well justified by the fundamental deterioration. The key question now is whether the company has the capacity to fund itself to profitability, without more cash. The company will need to return to revenue growth as quickly as possible, if it wants to see some enthusiasm from investors.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
This free interactive report on OCI's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
OCI shareholders are up 21% for the year (even including dividends). But that was short of the market average. But at least that's still a gain! Over five years the TSR has been a reduction of 0.6% per year, over five years. So this might be a sign the business has turned its fortunes around. It's always interesting to track share price performance over the longer term. But to understand OCI better, we need to consider many other factors. Even so, be aware that OCI is showing 2 warning signs in our investment analysis , you should know about...
Of course OCI may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
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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About KOSE:A010060
OCI Holdings
Provides various chemical products and energy solutions in South Korea, the United States, China, rest of Asia, Europe, and internationally.
Very undervalued with excellent balance sheet.
