Investors ignore increasing losses at Wonik HoldingsLtd (KOSDAQ:030530) as stock jumps 10% this past week

These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But if you pick the right individual stocks, you could make more than that. For example, the Wonik Holdings Co.,Ltd. (KOSDAQ:030530) share price is up 27% in the last 1 year, clearly besting the market decline of around 7.1% (not including dividends). So that should have shareholders smiling. On the other hand, longer term shareholders have had a tougher run, with the stock falling 7.9% in three years.

The past week has proven to be lucrative for Wonik HoldingsLtd investors, so let's see if fundamentals drove the company's one-year performance.

We've discovered 2 warning signs about Wonik HoldingsLtd. View them for free.

Wonik HoldingsLtd isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually desire strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Wonik HoldingsLtd actually shrunk its revenue over the last year, with a reduction of 14%. The stock is up 27% in that time, a fine performance given the revenue drop. To us that means that there isn't a lot of correlation between the past revenue performance and the share price, but a closer look at analyst forecasts and the bottom line may well explain a lot.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

If you are thinking of buying or selling Wonik HoldingsLtd stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's nice to see that Wonik HoldingsLtd shareholders have received a total shareholder return of 27% over the last year. That gain is better than the annual TSR over five years, which is 3%. 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. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should be aware of the 2 warning signs we've spotted with Wonik HoldingsLtd .

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are 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.