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. To wit, the Shandong Hontron Aluminum Industry Holding share price has climbed 79% in five years, easily topping the market return of 3.3% (ignoring dividends). On the other hand, the more recent gains haven't been so impressive, with shareholders gaining just 34%.

Although Shandong Hontron Aluminum Industry Holding has shed CN¥398m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

Given that Shandong Hontron Aluminum Industry Holding 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. When a company doesn't make profits, we'd generally hope to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

In the last 5 years Shandong Hontron Aluminum Industry Holding saw its revenue grow at 6.2% per year. That's a pretty good long term growth rate. Revenue has been growing at a reasonable clip, so it's debatable whether the share price growth of 12% full reflects the underlying business growth. If revenue growth can maintain for long enough, it's likely profits will flow. There's no doubt that it can be difficult to value pre-profit companies.

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

This free interactive report on Shandong Hontron Aluminum Industry Holding'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 Shandong Hontron Aluminum Industry Holding has rewarded shareholders with a total shareholder return of 34% in the last twelve months. That gain is better than the annual TSR over five years, which is 12%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Even so, be aware that Shandong Hontron Aluminum Industry Holding is showing 2 warning signs in our investment analysis , and 1 of those is potentially serious...

Of course Shandong Hontron Aluminum Industry Holding 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com