HanWool Semiconductor (KOSDAQ:320000) five-year losses have grown faster than shareholder returns have fallen, but the stock pops 13% this past week
HanWool Semiconductor, Inc. (KOSDAQ:320000) shareholders should be happy to see the share price up 13% in the last week. But if you look at the last five years the returns have not been good. You would have done a lot better buying an index fund, since the stock has dropped 24% in that half decade.
On a more encouraging note the company has added ₩8.4b to its market cap in just the last 7 days, so let's see if we can determine what's driven the five-year loss for shareholders.
HanWool Semiconductor isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. When a company doesn't make profits, we'd generally hope to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.
In the last five years HanWool Semiconductor saw its revenue shrink by 5.6% per year. That's not what investors generally want to see. The share price decline at a rate of 4% per year is disappointing. But it doesn't surprise given the falling revenue. It might be worth watching for signs of a turnaround - buyers are probably expecting one.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
This free interactive report on HanWool Semiconductor's balance sheet strength is a great place to start, if you want to investigate the stock further.
A Different Perspective
While the broader market gained around 75% in the last year, HanWool Semiconductor shareholders lost 13%. 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 4% per year over five years. We realise that Baron Rothschild has said investors should "buy when there is blood on the streets", but we caution that investors should first be sure they are buying a high quality business. It's always interesting to track share price performance over the longer term. But to understand HanWool Semiconductor better, we need to consider many other factors. Case in point: We've spotted 3 warning signs for HanWool Semiconductor you should be aware of, and 1 of them is a bit unpleasant.
Of course HanWool Semiconductor 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 South Korean exchanges.
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