Passive investing in index funds can generate returns that roughly match the overall market. But investors can boost returns by picking market-beating companies to own shares in. For example, the J-Yuan Trust Co., Ltd. (SHSE:600816) share price is up 29% in the last 1 year, clearly besting the market return of around 11% (not including dividends). That's a solid performance by our standards! Unfortunately the longer term returns are not so good, with the stock falling 15% in the last three years.

So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.

We don't think that J-Yuan Trust's modest trailing twelve month profit has the market's full attention at the moment. We think revenue is probably a better guide. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.

In the last year J-Yuan Trust saw its revenue grow by 403%. That's a head and shoulders above most loss-making companies. The solid 29% share price gain goes down pretty well, but it's not necessarily as good as you might expect given the top notch revenue growth. So quite frankly it could be a good time to investigate J-Yuan Trust in some detail. Human beings have trouble conceptualizing (and valuing) exponential growth. Is that what we're seeing here?

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

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

A Different Perspective

It's nice to see that J-Yuan Trust shareholders have received a total shareholder return of 29% over the last year. That certainly beats the loss of about 1.4% per year over the last half decade. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. It's always interesting to track share price performance over the longer term. But to understand J-Yuan Trust better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with J-Yuan Trust , and understanding them should be part of your investment process.

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.