Does Suprema HQ's (KOSDAQ:094840) Share Price Gain of 30% Match Its Business Performance?

It's been a soft week for Suprema HQ Inc. (KOSDAQ:094840) shares, which are down 16%. But over the last three years returns have been decent. After all, the stock has performed better than the market (25%) over that time, over which it gained 30%.

View our latest analysis for Suprema HQ

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 imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

Over the last three years, Suprema HQ failed to grow earnings per share, which fell 0.4% (annualized).

Based on these numbers, we think that the decline in earnings per share may not be a good representation of how the business has changed over the years. Therefore, it makes sense to look into other metrics.

You can only imagine how long term shareholders feel about the declining revenue trend (slipping at 6.9% per year). What's clear is that historic earnings and revenue aren't matching up with the share price action, very well. So you might have to dig deeper to get a grasp of the situation

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

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

A Different Perspective

Suprema HQ provided a TSR of 19% over the last twelve months. But that was short of the market average. But at least that's still a gain! Over five years the TSR has been a reduction of 5% per year, over five years. So this might be a sign the business has turned its fortunes around. 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. Case in point: We've spotted 2 warning signs for Suprema HQ you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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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