While this may not be enough for some shareholders, we think it’s good to see the stock price of DY Corporation (KRX: 013570) up 12% in a quarter alone But that doesn’t change the fact that the returns of the past three years have been far from satisfactory In fact, the stock price has fallen 42% in the past three years, well below the return of the market
To quote Buffett, “Ships will go around the world but the Flat Earth Society will thrive There will always be big gaps between price and value in the market…” One way to look at how market sentiment has changed over time is to examine the interaction between a company’s stock price and its earnings per share (EPS)
During the three unfortunate years of declining stock prices, DY has actually seen its earnings per share (EPS) improve by 15% per year Given the reaction of the stock price, one might suspect that EPS is not a good indicator of the company’s performance during the period (possibly due to a one-time loss or gain) Or the company was over-excited in the past, and its growth has therefore disappointed
It’s worth looking at other metrics, as EPS growth doesn’t seem to match the share price decline
With stable earnings over three years, it seems unlikely that the share price will reflect revenue There does not appear to be a clear correlation between fundamental business metrics and the share price This could mean the stock was previously overvalued, or it could mean an opportunity now
You can see the evolution of income and income over time in the image below (click on the graph to see the exact values)
You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graph
It is important to consider the total shareholder return, as well as the share price return, for any given stock TSR is a return calculation that takes into account the value of cash dividends (assuming any dividend received has been reinvested) and the calculated value of any discounted capital increase and spin-off It is fair to say that the TSR gives a more complete picture of the stocks that pay a dividend Note that for DY the TSR over the past 3 years was -38% which is better than the stock price return mentioned above This is largely the result of its dividend payments!
Investors in DY had a rough year, with a total loss of 52% (including dividends), against a market gain of around 23% Even good stock prices go down sometimes, but we want to see improvements in a company’s fundamentals, before you get too interested in it Unfortunately, last year’s performance may indicate unresolved challenges, as it was worse than the 4% annualized loss over of the last half-decade Generally speaking, long-term weakness in stock prices can be a bad sign, although contrarian investors may want to seek stock in the hopes of a rally. It is always interesting to follow the development of stock prices over the long term But in order to better understand DY, there are many other factors to consider For example, we have discovered two warning signs for DY that you should be aware of before invest here
If you’re anything like me, you won’t want to miss this free list of growing companies bought by insiders
Please note that the market returns quoted in this article reflect the average market-weighted returns of stocks that currently trade on the KR exchanges
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This Simply Wall St article is general in nature It does not constitute a recommendation to buy or sell shares, and does not take into account your goals or your financial situation We aim to provide you with a targeted analysis long term based on fundamental data Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative information Simply Wall St does not have any positions in the stocks mentioned * Interactive Brokers is ranked as the cheapest broker by StockBrokerscom Online Annual Review 2020 Do you have any comments on this article? Concerned about the content? Contact us directly You can also email the editorial team @ Simplywallstcom
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World news – AU – What kind of return would DY shareholders (KRX: 013570) have achieved if they bought their shares three years ago?
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