Did SHINSEGAE Information & Communication's (KRX:035510) Share Price Deserve to Gain 52%?

If you buy and hold a stock for many years, you'd hope to be making a profit. But more than that, you probably want to see it rise more than the market average. Unfortunately for shareholders, while the SHINSEGAE Information & Communication Co., LTD (KRX:035510) share price is up 52% in the last five years, that's less than the market return. Some buyers are laughing, though, with an increase of 33% in the last year.

View our latest analysis for SHINSEGAE Information & Communication

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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 five years of share price growth, SHINSEGAE Information & Communication achieved compound earnings per share (EPS) growth of 49% per year. This EPS growth is higher than the 9% average annual increase in the share price. So it seems the market isn't so enthusiastic about the stock these days. This cautious sentiment is reflected in its (fairly low) P/E ratio of 3.24.

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

This free interactive report on SHINSEGAE Information & Communication's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What about the Total Shareholder Return (TSR)?

We've already covered SHINSEGAE Information & Communication's share price action, but we should also mention its total shareholder return (TSR). Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Its history of dividend payouts mean that SHINSEGAE Information & Communication's TSR of 64% over the last 5 years is better than the share price return.

A Different Perspective

SHINSEGAE Information & Communication shareholders are up 35% for the year. But that return falls short of the market. On the bright side, that's still a gain, and it's actually better than the average return of 10% over half a decade This could indicate that the company is winning over new investors, as it pursues its strategy. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that SHINSEGAE Information & Communication is showing 1 warning sign in our investment analysis , you should know about...

But note: SHINSEGAE Information & Communication may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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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