Is KOSESLtd's (KOSDAQ:089890) Share Price Gain Of 242% Well Earned?

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on a lighter note, a good company can see its share price rise well over 100%. One great example is KOSES Co.,Ltd (KOSDAQ:089890) which saw its share price drive 242% higher over five years. It's even up 5.2% in the last week.

See our latest analysis for KOSESLtd

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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 the last half decade, KOSESLtd became profitable. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains. Since the company was unprofitable five years ago, but not three years ago, it's worth taking a look at the returns in the last three years, too. Indeed, the KOSESLtd share price has gained 155% in three years. During the same period, EPS grew by 22% each year. This EPS growth is lower than the 37% average annual increase in the share price over three years. So one can reasonably conclude the market is more enthusiastic about the stock than it was three years ago.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

Dive deeper into KOSESLtd's key metrics by checking this interactive graph of KOSESLtd's earnings, revenue and cash flow.

A Different Perspective

KOSESLtd shareholders are up 63% for the year. But that was short of the market average. The silver lining is that the gain was actually better than the average annual return of 28% per year over five year. This suggests the company might be improving over time. It's always interesting to track share price performance over the longer term. But to understand KOSESLtd better, we need to consider many other factors. Even so, be aware that KOSESLtd is showing 1 warning sign in our investment analysis , you should know about...

We will like KOSESLtd better if we see some big insider buys. While we wait, check out this free list of growing companies 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 KR exchanges.

If you’re looking to trade KOSESLtd, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

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.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

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