The simplest way to invest in stocks is to buy exchange traded funds. But you can significantly boost your returns by picking above-average stocks. For example, the Shenzhen Chengtian Weiye Technology Co., Ltd. (SZSE:300689) share price is up 51% in the last 1 year, clearly besting the market return of around 12% (not including dividends). So that should have shareholders smiling. Looking back further, the stock price is 43% higher than it was three years ago.

The past week has proven to be lucrative for Shenzhen Chengtian Weiye Technology investors, so let's see if fundamentals drove the company's one-year performance.

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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 Shenzhen Chengtian Weiye Technology saw its earnings per share (EPS) drop below zero. While some may see this as temporary, we're a skeptical bunch, and so we're a little surprised to see the share price go up. It may be that the company has done well on other metrics.

We are skeptical of the suggestion that the 0.1% dividend yield would entice buyers to the stock. Shenzhen Chengtian Weiye Technology's revenue actually dropped 25% over last year. So using a snapshot of key business metrics doesn't give us a good picture of why the market is bidding up the stock.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. It might be well worthwhile taking a look at our free report on Shenzhen Chengtian Weiye Technology's earnings, revenue and cash flow.

A Different Perspective

It's good to see that Shenzhen Chengtian Weiye Technology has rewarded shareholders with a total shareholder return of 52% in the last twelve months. Of course, that includes the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 4% 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 Shenzhen Chengtian Weiye Technology better, we need to consider many other factors. For instance, we've identified 2 warning signs for Shenzhen Chengtian Weiye Technology (1 shouldn't be ignored) that you should be aware of.

But note: Shenzhen Chengtian Weiye Technology 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 Chinese 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.