If You Had Bought Yoosung T&S' (KOSDAQ:024800) Shares Three Years Ago You Would Be Down 24%

While it may not be enough for some shareholders, we think it is good to see the Yoosung T&S Co., Ltd (KOSDAQ:024800) share price up 26% in a single quarter. But that cannot eclipse the less-than-impressive returns over the last three years. After all, the share price is down 24% in the last three years, significantly under-performing the market.

Check out our latest analysis for Yoosung T&S

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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).

During the unfortunate three years of share price decline, Yoosung T&S actually saw its earnings per share (EPS) improve by 45% per year. This is quite a puzzle, and suggests there might be something temporarily buoying the share price. Or else the company was over-hyped in the past, and so its growth has disappointed.

It's worth taking a look at other metrics, because the EPS growth doesn't seem to match with the falling share price.

The modest 0.5% dividend yield is unlikely to be guiding the market view of the stock. Arguably the revenue decline of 11% per year has people thinking Yoosung T&S is shrinking. And that's not surprising, since it seems unlikely that EPS growth can continue for long in the absence of revenue growth.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Take a more thorough look at Yoosung T&S' financial health with this free report on its balance sheet.

A Different Perspective

Yoosung T&S provided a TSR of 13% 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 3% 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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Yoosung T&S (at least 1 which is a bit unpleasant) , and understanding them should be part of your investment process.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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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