The 10% return this week takes Daemyung SonoseasonLtd's (KOSDAQ:007720) shareholders one-year gains to 107%

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But if you pick the right business to buy shares in, you can make more than you can lose. Take, for example Daemyung Sonoseason Co.,Ltd. (KOSDAQ:007720). Its share price is already up an impressive 107% in the last twelve months. It's also good to see the share price up 41% over the last quarter. Zooming out, the stock is actually down 1.3% in the last three years.

After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.

See our latest analysis for Daemyung SonoseasonLtd

Given that Daemyung SonoseasonLtd only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. 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.

Daemyung SonoseasonLtd actually shrunk its revenue over the last year, with a reduction of 16%. So we would not have expected the share price to rise 107%. It just goes to show the market doesn't always pay attention to the reported numbers. Of course, it could be that the market expected this revenue drop.

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

This free interactive report on Daemyung SonoseasonLtd's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's nice to see that Daemyung SonoseasonLtd shareholders have received a total shareholder return of 107% over the last year. There's no doubt those recent returns are much better than the TSR loss of 2% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Daemyung SonoseasonLtd better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for Daemyung SonoseasonLtd you should know about.

We will like Daemyung SonoseasonLtd better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on South Korean exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.