Investors bid JOONGANG ADVANCED MATERIALS (KOSDAQ:051980) up ₩92b despite increasing losses YoY, taking five-year CAGR to 39%

Some JOONGANG ADVANCED MATERIALS Co., Ltd (KOSDAQ:051980) shareholders are probably rather concerned to see the share price fall 39% over the last three months. But that doesn't change the fact that the returns over the last half decade have been spectacular. To be precise, the stock price is 425% higher than it was five years ago, a wonderful performance by any measure. So it might be that some shareholders are taking profits after good performance. But the real question is whether the business fundamentals can improve over the long term.

The past week has proven to be lucrative for JOONGANG ADVANCED MATERIALS investors, so let's see if fundamentals drove the company's five-year performance.

Check out our latest analysis for JOONGANG ADVANCED MATERIALS

JOONGANG ADVANCED MATERIALS wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. 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.

For the last half decade, JOONGANG ADVANCED MATERIALS can boast revenue growth at a rate of 23% per year. Even measured against other revenue-focussed companies, that's a good result. Arguably, this is well and truly reflected in the strong share price gain of 39%(per year) over the same period. It's never too late to start following a top notch stock like JOONGANG ADVANCED MATERIALS, since some long term winners go on winning for decades. On the face of it, this looks lke a good opportunity, although we note sentiment seems very positive already.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

Take a more thorough look at JOONGANG ADVANCED MATERIALS' financial health with this free report on its balance sheet.

A Different Perspective

It's nice to see that JOONGANG ADVANCED MATERIALS shareholders have received a total shareholder return of 217% over the last year. That gain is better than the annual TSR over five years, which is 39%. 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. 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. Take risks, for example - JOONGANG ADVANCED MATERIALS has 3 warning signs (and 1 which shouldn't be ignored) we think you should know about.

But note: JOONGANG ADVANCED MATERIALS 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 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.