If You Had Bought Daesung Industrial's (KRX:128820) Shares Three Years Ago You Would Be Down 33%

In order to justify the effort of selecting individual stocks, it's worth striving to beat the returns from a market index fund. 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 Daesung Industrial Co., Ltd. (KRX:128820) shareholders, since the share price is down 33% in the last three years, falling well short of the market return of around 27%. Unhappily, the share price slid 2.6% in the last week.

Check out our latest analysis for Daesung Industrial

Because Daesung Industrial 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. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.

Over the last three years, Daesung Industrial's revenue dropped 2.4% per year. That is not a good result. The stock has disappointed holders over the last three years, falling 10%, annualized. And with no profits, and weak revenue, are you surprised? However, in this kind of situation you can sometimes find opportunity, where sentiment is negative but the company is actually making good progress.

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 Daesung Industrial'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, Daesung Industrial shareholders lost 5.2%. 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. On the bright side, long term shareholders have made money, with a gain of 0.9% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. It's always interesting to track share price performance over the longer term. But to understand Daesung Industrial better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Daesung Industrial you should be aware of, and 1 of them makes us a bit uncomfortable.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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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