The 19% return this week takes Jaeyoung Solutec's (KOSDAQ:049630) shareholders three-year gains to 804%
For us, stock picking is in large part the hunt for the truly magnificent stocks. But when you hold the right stock for the right time period, the rewards can be truly huge. One such superstar is Jaeyoung Solutec Co., Ltd. (KOSDAQ:049630), which saw its share price soar 804% in three years. Also pleasing for shareholders was the 488% gain in the last three months. It really delights us to see such great share price performance for investors.
After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.
While Jaeyoung Solutec made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.
In the last 3 years Jaeyoung Solutec saw its revenue grow at 4.6% per year. That's not a very high growth rate considering it doesn't make profits. Therefore, we're a little surprised to see the share price gain has been so strong, at 108% per year, compound, over three years. A win is a win, even if the revenue growth doesn't really explain it, in our view). Shareholders would want to be sure that the share price rise is sustainable.
You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).
If you are thinking of buying or selling Jaeyoung Solutec stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
We're pleased to report that Jaeyoung Solutec shareholders have received a total shareholder return of 637% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 36% per year), it would seem that the stock's performance has improved in recent times. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Jaeyoung Solutec (of which 3 are concerning!) you should know about.
But note: Jaeyoung Solutec may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.