UJU Electronics (KOSDAQ:065680) sheds ₩17b, company earnings and investor returns have been trending downwards for past three years

If you love investing in stocks you're bound to buy some losers. Long term UJU Electronics Co. Ltd (KOSDAQ:065680) shareholders know that all too well, since the share price is down considerably over three years. Sadly for them, the share price is down 53% in that time. The falls have accelerated recently, with the share price down 24% in the last three months. However, one could argue that the price has been influenced by the general market, which is down 12% in the same timeframe.

After losing 15% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

View our latest analysis for UJU Electronics

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

UJU Electronics saw its EPS decline at a compound rate of 12% per year, over the last three years. The share price decline of 22% is actually steeper than the EPS slippage. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy. The less favorable sentiment is reflected in its current P/E ratio of 7.48.

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

We know that UJU Electronics has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst revenue forecasts.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, UJU Electronics' TSR for the last 3 years was -51%, which exceeds the share price return mentioned earlier. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

We regret to report that UJU Electronics shareholders are down 8.4% for the year (even including dividends). Unfortunately, that's worse than the broader market decline of 3.7%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. Longer term investors wouldn't be so upset, since they would have made 10%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It's always interesting to track share price performance over the longer term. But to understand UJU Electronics better, we need to consider many other factors. For instance, we've identified 1 warning sign for UJU Electronics that you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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.