Did Digital Imaging Technology's (KOSDAQ:110990) Share Price Deserve to Gain 43%?

We believe investing is smart because history shows that stock markets go higher in the long term. But not every stock you buy will perform as well as the overall market. For example, the Digital Imaging Technology, INC. (KOSDAQ:110990), share price is up over the last year, but its gain of 43% trails the market return. Digital Imaging Technology hasn't been listed for long, so it's still not clear if it is a long term winner.

See our latest analysis for Digital Imaging Technology

We don't think that Digital Imaging Technology's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. For shareholders to have confidence a company will grow profits significantly, it must grow revenue.

In the last year Digital Imaging Technology saw its revenue shrink by 62%. The lacklustre gain of 43% over twelve months, is not a bad result given the falling revenue. Generally we're pretty unenthusiastic about loss making stocks that are not growing revenue.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

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

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. As it happens, Digital Imaging Technology's TSR for the last year was 47%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

We're happy to report that Digital Imaging Technology are up 47% over the year (even including dividends). While it's always nice to make a profit on the stock market, we do note that the TSR was no better than the broader market return of about 90%. It's always interesting to track share price performance over the longer term. But to understand Digital Imaging Technology better, we need to consider many other factors. Even so, be aware that Digital Imaging Technology is showing 4 warning signs in our investment analysis , and 1 of those shouldn't be ignored...

Of course Digital Imaging Technology may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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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