When we invest, we're generally looking for stocks that outperform the market average. Buying under-rated businesses is one path to excess returns. For example, the (KRX:012330) share price is up 52% in the last 5 years, clearly besting the market return of around 32% (ignoring dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 21% in the last year, including dividends.

After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.

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While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During five years of share price growth, Hyundai MobisLtd achieved compound earnings per share (EPS) growth of 16% per year. This EPS growth is higher than the 9% average annual increase in the share price. So it seems the market isn't so enthusiastic about the stock these days. This cautious sentiment is reflected in its (fairly low) P/E ratio of 5.96.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

We know that Hyundai MobisLtd has improved its bottom line lately, but is it going to grow revenue? If you're interested, you could check this report showing consensus revenue forecasts.

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. We note that for Hyundai MobisLtd the TSR over the last 5 years was 66%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

We're pleased to report that Hyundai MobisLtd shareholders have received a total shareholder return of 21% over one year. And that does include the dividend. That's better than the annualised return of 11% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. Is Hyundai MobisLtd cheap compared to other companies? These 3 valuation measures might help you decide.

Of course, So take a peek at this list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on South Korean exchanges.