DSK's (KOSDAQ:109740) growing losses don't faze investors as the stock spikes 14% this past week

If you want to compound wealth in the stock market, you can do so by buying an index fund. But investors can boost returns by picking market-beating companies to own shares in. To wit, the DSK Co., Ltd. (KOSDAQ:109740) share price is 75% higher than it was a year ago, much better than the market return of around 56% (not including dividends) in the same period. That's a solid performance by our standards! Also impressive, the stock is up 42% over three years, making long term shareholders happy, too.

Since the stock has added ₩27b to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

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Given that DSK didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

In the last year DSK saw its revenue shrink by 4.0%. Despite the lack of revenue growth, the stock has returned a solid 75% the last twelve months. We can correlate the share price rise with revenue or profit growth, but it seems the market had previously expected weaker results, and sentiment around the stock is improving.

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 DSK stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

We're pleased to report that DSK shareholders have received a total shareholder return of 75% over one 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. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. You might want to assess this data-rich visualization of its earnings, revenue and cash flow.

We will like DSK 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.