STUDIO SANTA CLAUS ENTERTAINMENT's (KOSDAQ:204630) Stock Price Has Reduced 45% In The Past Three Years

Many investors define successful investing as beating the market average over the long term. But its virtually certain that sometimes you will buy stocks that fall short of the market average returns. Unfortunately, that's been the case for longer term STUDIO SANTA CLAUS ENTERTAINMENT Co., Ltd. (KOSDAQ:204630) shareholders, since the share price is down 45% in the last three years, falling well short of the market return of around 22%. But it's up 5.6% in the last week.

See our latest analysis for STUDIO SANTA CLAUS ENTERTAINMENT

Because STUDIO SANTA CLAUS ENTERTAINMENT made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. 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 three years STUDIO SANTA CLAUS ENTERTAINMENT saw its revenue shrink by 12% per year. That is not a good result. The stock has disappointed holders over the last three years, falling 13%, annualized. And with no profits, and weak revenue, are you surprised? Of course, sentiment could become too negative, and the company may actually be making progress to profitability.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

While the broader market gained around 33% in the last year, STUDIO SANTA CLAUS ENTERTAINMENT shareholders lost 13%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 0.7% per year over five years. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with STUDIO SANTA CLAUS ENTERTAINMENT , and understanding them should be part of your investment process.

Of course STUDIO SANTA CLAUS 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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