SK Rent A Car's (KRX:068400) Shareholders Are Down 22% On Their Shares

It's easy to match the overall market return by buying an index fund. But if you buy individual stocks, you can do both better or worse than that. Investors in SK Rent A Car Co., Ltd (KRX:068400) have tasted that bitter downside in the last year, as the share price dropped 22%. That contrasts poorly with the market return of 38%. However, the longer term returns haven't been so bad, with the stock down 11% in the last three years. It's up 1.7% in the last seven days.

See our latest analysis for SK Rent A Car

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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).

Even though the SK Rent A Car share price is down over the year, its EPS actually improved. It could be that the share price was previously over-hyped.

The divergence between the EPS and the share price is quite notable, during the year. But we might find some different metrics explain the share price movements better.

SK Rent A Car managed to grow revenue over the last year, which is usually a real positive. Since the fundamental metrics don't readily explain the share price drop, there might be an opportunity if the market has overreacted.

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

We know that SK Rent A Car has improved its bottom line lately, but what does the future have in store? If you are thinking of buying or selling SK Rent A Car stock, you should check out this free report showing analyst profit forecasts.

A Different Perspective

While the broader market gained around 38% in the last year, SK Rent A Car shareholders lost 22%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 3% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. It's always interesting to track share price performance over the longer term. But to understand SK Rent A Car better, we need to consider many other factors. For instance, we've identified 2 warning signs for SK Rent A Car that you should be aware of.

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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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