If You Had Bought Taiwan Kong KingLtd (GTSM:3093) Stock A Year Ago, You Could Pocket A 50% Gain Today

Passive investing in index funds can generate returns that roughly match the overall market. But if you pick the right individual stocks, you could make more than that. To wit, the Taiwan Kong King Co.,Ltd (GTSM:3093) share price is 50% higher than it was a year ago, much better than the market return of around 26% (not including dividends) in the same period. That's a solid performance by our standards! It is also impressive that the stock is up 41% over three years, adding to the sense that it is a real winner.

See our latest analysis for Taiwan Kong KingLtd

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 last year Taiwan Kong KingLtd grew its earnings per share (EPS) by 68%. It's fair to say that the share price gain of 50% did not keep pace with the EPS growth. Therefore, it seems the market isn't as excited about Taiwan Kong KingLtd as it was before. This could be an opportunity. The caution is also evident in the lowish P/E ratio of 11.30.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

This free interactive report on Taiwan Kong KingLtd'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 incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. As it happens, Taiwan Kong KingLtd's TSR for the last year was 58%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

A Different Perspective

It's nice to see that Taiwan Kong KingLtd shareholders have received a total shareholder return of 58% over the last year. Of course, that includes the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 13% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Taiwan Kong KingLtd better, we need to consider many other factors. For example, we've discovered 2 warning signs for Taiwan Kong KingLtd that you should be aware of before investing here.

Of course Taiwan Kong KingLtd 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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