How Much Did Koge Micro Tech's(GTSM:4568) Shareholders Earn From Share Price Movements Over The Last Three Years?

For many investors, the main point of stock picking is to generate higher returns than the overall market. But its virtually certain that sometimes you will buy stocks that fall short of the market average returns. We regret to report that long term Koge Micro Tech Co., Ltd. (GTSM:4568) shareholders have had that experience, with the share price dropping 29% in three years, versus a market return of about 51%. The good news is that the stock is up 2.1% in the last week.

View our latest analysis for Koge Micro Tech

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 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).

Koge Micro Tech saw its EPS decline at a compound rate of 7.0% per year, over the last three years. The share price decline of 11% is actually steeper than the EPS slippage. So it's likely that the EPS decline has disappointed the market, leaving investors hesitant to buy.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

This free interactive report on Koge Micro Tech's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

What About Dividends?

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for Koge Micro Tech the TSR over the last 3 years was -18%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

A Different Perspective

Over the last year Koge Micro Tech shareholders have received a TSR of 22%. Unfortunately this falls short of the market return of around 36%. The silver lining is that the recent rise is far preferable to the annual loss of 6% that shareholders have suffered over the last three years. It could well be that the business is stabilizing. 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. For instance, we've identified 2 warning signs for Koge Micro Tech that you should be aware of.

Of course Koge Micro Tech may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on TW 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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