Hana Materials (KOSDAQ:166090) Shareholders Booked A 81% Gain In The Last Three Years

By buying an index fund, investors can approximate the average market return. But many of us dare to dream of bigger returns, and build a portfolio ourselves. For example, the Hana Materials Inc. (KOSDAQ:166090) share price is up 81% in the last three years, clearly besting the market return of around 21% (not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 63% in the last year , including dividends .

See our latest analysis for Hana Materials

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 three years of share price growth, Hana Materials achieved compound earnings per share growth of 18% per year. We note that the 22% yearly (average) share price gain isn't too far from the EPS growth rate. Coincidence? Probably not. This observation indicates that the market's attitude to the business hasn't changed all that much. Rather, the share price has approximately tracked EPS growth.

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

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

What about the Total Shareholder Return (TSR)?

Investors should note that there's a difference between Hana Materials' total shareholder return (TSR) and its share price change, which we've covered above. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Hana Materials hasn't been paying dividends, but its TSR of 89% exceeds its share price return of 81%, implying it has either spun-off a business, or raised capital at a discount; thereby providing additional value to shareholders.

A Different Perspective

It's nice to see that Hana Materials shareholders have gained 63% (in total) over the last year. So this year's TSR was actually better than the three-year TSR (annualized) of 24%. Given the track record of solid returns over varying time frames, it might be worth putting Hana Materials on your watchlist. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for Hana Materials you should know about.

If you are like me, then you will not want to miss this free list of growing companies 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 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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