Investors Who Bought Tapex (KRX:055490) Shares A Year Ago Are Now Up 65%

Passive investing in index funds can generate returns that roughly match the overall market. But investors can boost returns by picking market-beating companies to own shares in. For example, the Tapex Co., Ltd. (KRX:055490) share price is up 65% in the last year, clearly besting the market return of around 31% (not including dividends). So that should have shareholders smiling. However, the longer term returns haven't been so impressive, with the stock up just 10% in the last three years.

See our latest analysis for Tapex

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Tapex was able to grow EPS by 151% in the last twelve months. It's fair to say that the share price gain of 65% did not keep pace with the EPS growth. Therefore, it seems the market isn't as excited about Tapex as it was before. This could be an opportunity. This cautious sentiment is reflected in its (fairly low) P/E ratio of 11.46.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

It might be well worthwhile taking a look at our free report on Tapex's earnings, revenue and cash flow.

A Different Perspective

It's nice to see that Tapex shareholders have gained 65% (in total) over the last year. That's better than the annualized TSR of 3% over the last three years. Given the track record of solid returns over varying time frames, it might be worth putting Tapex on your watchlist. It's always interesting to track share price performance over the longer term. But to understand Tapex better, we need to consider many other factors. For instance, we've identified 1 warning sign for Tapex that you should be aware of.

But note: Tapex may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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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