Update: YG Entertainment (KOSDAQ:122870) Stock Gained 64% In The Last Three Years

By buying an index fund, you can roughly match the market return with ease. But many of us dare to dream of bigger returns, and build a portfolio ourselves. For example, YG Entertainment Inc. (KOSDAQ:122870) shareholders have seen the share price rise 64% over three years, well in excess of the market return (26%, not including dividends). On the other hand, the returns haven't been quite so good recently, with shareholders up just 42%.

Check out our latest analysis for YG Entertainment

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Over the last three years, YG Entertainment failed to grow earnings per share, which fell 55% (annualized). In this instance, recent extraordinary items impacted the earnings.

Thus, it seems unlikely that the market is focussed on EPS growth at the moment. Therefore, we think it's worth considering other metrics as well.

You can only imagine how long term shareholders feel about the declining revenue trend (slipping at 12% per year). The only thing that's clear is there is low correlation between YG Entertainment's share price and its historic fundamental data. Further research may be required!

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

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

A Different Perspective

YG Entertainment shareholders gained a total return of 42% during the year. But that was short of the market average. On the bright side, that's still a gain, and it's actually better than the average return of 1.8% over half a decade This could indicate that the company is winning over new investors, as it pursues its strategy. You could get a better understanding of YG Entertainment's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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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