The LG Chem (KRX:051910) Share Price Is Up 169% And Shareholders Are Boasting About It

Unless you borrow money to invest, the potential losses are limited. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! For example, the LG Chem, Ltd. (KRX:051910) share price had more than doubled in just one year - up 169%. It's also good to see the share price up 25% over the last quarter. But this move may well have been assisted by the reasonably buoyant market (up 14% in 90 days). It is also impressive that the stock is up 112% over three years, adding to the sense that it is a real winner.

Check out our latest analysis for LG Chem

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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.

LG Chem was able to grow EPS by 49% in the last twelve months. This EPS growth is significantly lower than the 169% increase in the share price. This indicates that the market is now more optimistic about the stock. This favorable sentiment is reflected in its (fairly optimistic) P/E ratio of 89.26.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

We know that LG Chem has improved its bottom line lately, but is it going to grow revenue? Check if analysts think LG Chem will grow revenue in the future.

A Different Perspective

It's nice to see that LG Chem shareholders have received a total shareholder return of 170% over the last year. And that does include the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 21% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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 2 warning signs we've spotted with LG Chem .

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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