These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But you can significantly boost your returns by picking above-average stocks. To wit, the Nanjing Railway New Technology Co.,Ltd. (SZSE:301016) share price is 33% higher than it was a year ago, much better than the market decline of around 8.9% (not including dividends) in the same period. So that should have shareholders smiling. We'll need to follow Nanjing Railway New TechnologyLtd for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

Check out our latest analysis for Nanjing Railway New TechnologyLtd

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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).

Over the last twelve months, Nanjing Railway New TechnologyLtd actually shrank its EPS by 35%.

So we don't think that investors are paying too much attention to EPS. Indeed, when EPS is declining but the share price is up, it often means the market is considering other factors.

We are skeptical of the suggestion that the 0.9% dividend yield would entice buyers to the stock. Unfortunately Nanjing Railway New TechnologyLtd's fell 19% over twelve months. So using a snapshot of key business metrics doesn't give us a good picture of why the market is bidding up the stock.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Balance sheet strength is crucial. It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

Nanjing Railway New TechnologyLtd shareholders should be happy with the total gain of 34% over the last twelve months, including dividends. A substantial portion of that gain has come in the last three months, with the stock up 17% in that time. This suggests the company is continuing to win over new investors. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Nanjing Railway New TechnologyLtd , and understanding them should be part of your investment process.

Of course Nanjing Railway New TechnologyLtd may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.