When we invest, we're generally looking for stocks that outperform the market average. And in our experience, buying the right stocks can give your wealth a significant boost. For example, the Suzhou Hailu Heavy Industry Co.,Ltd (SZSE:002255) share price is up 23% in the last 5 years, clearly besting the market return of around 9.5% (ignoring dividends). On the other hand, the more recent gains haven't been so impressive, with shareholders gaining just 1.8%.

Since the long term performance has been good but there's been a recent pullback of 8.9%, let's check if the fundamentals match the share price.

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During the five years of share price growth, Suzhou Hailu Heavy IndustryLtd moved from a loss to profitability. That's generally thought to be a genuine positive, so investors may expect to see an increasing share price.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

It might be well worthwhile taking a look at our free report on Suzhou Hailu Heavy IndustryLtd's earnings, revenue and cash flow.

A Different Perspective

It's good to see that Suzhou Hailu Heavy IndustryLtd has rewarded shareholders with a total shareholder return of 1.8% in the last twelve months. However, the TSR over five years, coming in at 4% per year, is even more impressive. The pessimistic view would be that be that the stock has its best days behind it, but on the other hand the price might simply be moderating while the business itself continues to execute. Is Suzhou Hailu Heavy IndustryLtd cheap compared to other companies? These 3 valuation measures might help you decide.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free 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 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.