The total return for Suprema (KOSDAQ:236200) investors has risen faster than earnings growth over the last year

Suprema Inc. (KOSDAQ:236200) shareholders might be concerned after seeing the share price drop 10% in the last week. Taking a longer term view we see the stock is up over one year. But to be blunt its return of 36% fall short of what you could have got from an index fund (around 59%).

In light of the stock dropping 10% in the past week, we want to investigate the longer term story, and see if fundamentals have been the driver of the company's positive one-year return.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During the last year Suprema grew its earnings per share (EPS) by 18%. This EPS growth is significantly lower than the 36% increase in the share price. This indicates that the market is now more optimistic about the stock.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

We know that Suprema has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Suprema will grow revenue in the future.

A Different Perspective

Suprema shareholders are up 36% for the year. But that return falls short of the market. The silver lining is that the gain was actually better than the average annual return of 1.7% per year over five year. This could indicate that the company is winning over new investors, as it pursues its strategy. Is Suprema cheap compared to other companies? These 3 valuation measures might help you decide.

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.

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.