Reflecting on FNC ENTERTAINMENT's (KOSDAQ:173940) Share Price Returns Over The Last Five Years

Statistically speaking, long term investing is a profitable endeavour. But unfortunately, some companies simply don't succeed. For example the FNC ENTERTAINMENT Co., Ltd. (KOSDAQ:173940) share price dropped 66% over five years. That's an unpleasant experience for long term holders. And we doubt long term believers are the only worried holders, since the stock price has declined 23% over the last twelve months. On the other hand the share price has bounced 5.1% over the last week. But this could be related to the strong market, with stocks up around 6.1% in the same time.

See our latest analysis for FNC ENTERTAINMENT

FNC ENTERTAINMENT wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Shareholders of unprofitable companies usually expect strong revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last half decade, FNC ENTERTAINMENT saw its revenue increase by 0.2% per year. That's not a very high growth rate considering it doesn't make profits. It's likely this weak growth has contributed to an annualised return of 11% for the last five years. We want to see an acceleration of revenue growth (or profits) before showing much interest in this one. However, it's possible too many in the market will ignore it, and there may be an opportunity if it starts to recover down the track.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

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

A Different Perspective

While the broader market gained around 47% in the last year, FNC ENTERTAINMENT shareholders lost 23%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Unfortunately, last year's performance may indicate unresolved challenges, given that it was worse than the annualised loss of 11% over the last half decade. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 1 warning sign for FNC ENTERTAINMENT you should be aware of.

Of course FNC ENTERTAINMENT 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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