Did You Miss SK ChemicalsLtd's (KRX:285130) Whopping 729% Share Price Gain?

Active investing isn't easy, but for those that do it, the aim is to find the best companies to buy, and to profit handsomely. When you find (and hold) a big winner, you can markedly improve your finances. In the case of SK Chemicals Co.,Ltd. (KRX:285130), the share price is up an incredible 729% in the last year alone. And in the last month, the share price has gained 7.0%. We'll need to follow SK ChemicalsLtd for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

We love happy stories like this one. The company should be really proud of that performance!

View our latest analysis for SK ChemicalsLtd

We don't think that SK ChemicalsLtd's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

Over the last twelve months, SK ChemicalsLtd's revenue grew by 14%. That's not a very high growth rate considering it doesn't make profits. So the 729% gain in just twelve months is completely unexpected. It's great to see that some have made big profits, but we aren't so sure that the increase is justified. It just goes to show that big money can be made if you buy the right stock early.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

We know that SK ChemicalsLtd has improved its bottom line lately, but what does the future have in store? You can see what analysts are predicting for SK ChemicalsLtd in this interactive graph of future profit estimates.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of SK ChemicalsLtd, it has a TSR of 735% for the last year. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

A Different Perspective

It's nice to see that SK ChemicalsLtd shareholders have gained 735% over the last year, including dividends. The more recent returns haven't been as impressive as the longer term returns, coming in at just 8.0%. It seems likely the market is waiting on fundamental developments with the business before pushing the share price higher (or lower). 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. Even so, be aware that SK ChemicalsLtd is showing 2 warning signs in our investment analysis , and 1 of those is a bit unpleasant...

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 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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