If You Had Bought Charm EngineeringLtd (KRX:009310) Stock A Year Ago, You Could Pocket A 62% Gain Today

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. Unfortunately for shareholders, while the Charm Engineering Co.,Ltd. (KRX:009310) share price is up 62% in the last year, that falls short of the market return. Zooming out, the stock is actually down 32% in the last three years.

Check out our latest analysis for Charm EngineeringLtd

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Charm EngineeringLtd was able to grow EPS by 88% in the last twelve months. We note, however, that extraordinary items have impacted earnings. It's fair to say that the share price gain of 62% did not keep pace with the EPS growth. So it seems like the market has cooled on Charm EngineeringLtd, despite the growth. Interesting.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

A Different Perspective

Over the last year Charm EngineeringLtd shareholders have received a TSR of 62%. While you don't go broke making a profit, this return was actually lower than the average market return of about 102%. On the bright side, that's certainly better than the yearly loss of about 10% endured over the last three years, implying that the company is doing better recently. It could well be that the business is stabilizing. It's always interesting to track share price performance over the longer term. But to understand Charm EngineeringLtd better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Charm EngineeringLtd (of which 1 is significant!) you should know about.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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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