By buying an index fund, you can roughly match the market return with ease. But if you pick the right individual stocks, you could make more than that. For example, Sinodata Co., Ltd. (SZSE:002657) shareholders have seen the share price rise 38% over three years, well in excess of the market decline (17%, not including dividends). On the other hand, the returns haven't been quite so good recently, with shareholders up just 12%.

Since the long term performance has been good but there's been a recent pullback of 8.3%, let's check if the fundamentals match the share price.

See our latest analysis for Sinodata

Given that Sinodata didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Sinodata actually saw its revenue drop by 14% per year over three years. The revenue growth might be lacking but the share price has gained 11% each year in that time. Unless the company is going to make profits soon, we would be pretty cautious about it.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

This free interactive report on Sinodata's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that Sinodata has rewarded shareholders with a total shareholder return of 12% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 5% 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 Sinodata better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Sinodata (including 1 which is concerning) .

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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.