Investors push HanWool Materials Science (KOSDAQ:091440) 11% lower this week, company's increasing losses might be to blame

Some HanWool Materials Science, Inc. (KOSDAQ:091440) shareholders are probably rather concerned to see the share price fall 39% over the last three months. But that doesn't detract from the splendid returns of the last year. Like an eagle, the share price soared 133% in that time. So we think most shareholders won't be too upset about the recent fall. The real question is whether the business is trending in the right direction.

While the stock has fallen 11% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

View our latest analysis for HanWool Materials Science

HanWool Materials Science isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally hope to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last year HanWool Materials Science saw its revenue shrink by 27%. So we would not have expected the share price to rise 133%. It just goes to show the market doesn't always pay attention to the reported numbers. It's quite likely the revenue fall was already priced in, anyway.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

This free interactive report on HanWool Materials Science's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that HanWool Materials Science has rewarded shareholders with a total shareholder return of 133% in the last twelve months. That's better than the annualised return of 11% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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 3 warning signs with HanWool Materials Science (at least 1 which shouldn't be ignored) , and understanding them should be part of your investment process.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

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.