KAON Group (KOSDAQ:078890) delivers shareholders respectable 63% return over 1 year, surging 23% in the last week alone

On average, over time, stock markets tend to rise higher. This makes investing attractive. But not every stock you buy will perform as well as the overall market. For example, the KAON Group Co., Ltd. (KOSDAQ:078890), share price is up over the last year, but its gain of 63% trails the market return. Unfortunately the longer term returns are not so good, with the stock falling 13% in the last three years.

Since the stock has added ₩16b to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

KAON Group 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. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

In the last year KAON Group saw its revenue grow by 6.7%. That's not great considering the company is losing money. It's probably fair to say that the modest growth is reflected in the modest share price gain of 63%. It might be worth thinking about how long it will take the company to turn a profit.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

KAON Group provided a TSR of 63% over the last twelve months. Unfortunately this falls short of the market return. On the bright side, that's still a gain, and it is certainly better than the yearly loss of about 1.0% endured over half a decade. It could well be that the business is stabilizing. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with KAON Group (at least 1 which shouldn't be ignored) , and understanding them should be part of your investment process.

We will like KAON Group better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on South Korean exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.