Investors Who Bought Sam Chun Dang Pharm (KOSDAQ:000250) Shares Five Years Ago Are Now Up 644%

Sam Chun Dang Pharm. Co., Ltd (KOSDAQ:000250) shareholders have seen the share price descend 20% over the month. But that doesn't undermine the fantastic longer term performance (measured over five years). To be precise, the stock price is 644% higher than it was five years ago, a wonderful performance by any measure. So it might be that some shareholders are taking profits after good performance. Of course what matters most is whether the business can improve itself sustainably, thus justifying a higher price.

Anyone who held for that rewarding ride would probably be keen to talk about it.

Check out our latest analysis for Sam Chun Dang Pharm

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.

During five years of share price growth, Sam Chun Dang Pharm actually saw its EPS drop 15% per year.

Essentially, it doesn't seem likely that investors are focused on EPS. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

We doubt the modest 0.08% dividend yield is attracting many buyers to the stock. In contrast revenue growth of 6.5% per year is probably viewed as evidence that Sam Chun Dang Pharm is growing, a real positive. In that case, the company may be sacrificing current earnings per share to drive growth.

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

If you are thinking of buying or selling Sam Chun Dang Pharm stock, you should check out this FREE detailed report on its balance sheet.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. 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. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, Sam Chun Dang Pharm's TSR for the last 5 years was 652%, which exceeds the share price return mentioned earlier. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's nice to see that Sam Chun Dang Pharm shareholders have received a total shareholder return of 72% over the last year. And that does include the dividend. That gain is better than the annual TSR over five years, which is 50%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Sam Chun Dang Pharm better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Sam Chun Dang Pharm you should know about.

But note: Sam Chun Dang Pharm 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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