Lotte Shopping (KRX:023530) adds ₩155b to market cap in the past 7 days, though investors from five years ago are still down 13%

While not a mind-blowing move, it is good to see that the Lotte Shopping Co., Ltd. (KRX:023530) share price has gained 27% in the last three months. But if you look at the last five years the returns have not been good. In fact, the share price is down 30%, which falls well short of the return you could get by buying an index fund.

On a more encouraging note the company has added ₩155b to its market cap in just the last 7 days, so let's see if we can determine what's driven the five-year loss for shareholders.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

Lotte Shopping isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last five years Lotte Shopping saw its revenue shrink by 4.0% per year. While far from catastrophic that is not good. The stock hasn't done well for shareholders in the last five years, falling 5%, annualized. Unfortunately, though, it makes sense given the lack of either profits or revenue growth. It might be worth watching for signs of a turnaround - buyers are probably expecting one.

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

Lotte Shopping is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. Given we have quite a good number of analyst forecasts, it might be well worth checking out this free chart depicting consensus estimates.

What About Dividends?

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Lotte Shopping the TSR over the last 5 years was -13%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

A Different Perspective

It's nice to see that Lotte Shopping shareholders have received a total shareholder return of 8.2% over the last year. And that does include the dividend. Notably the five-year annualised TSR loss of 3% per year compares very unfavourably with the recent share price performance. 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 Lotte Shopping better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Lotte Shopping .

We will like Lotte Shopping 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.