These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). To wit, the LingNan Eco&Culture-Tourism Co.,Ltd. (SZSE:002717) share price is 30% higher than it was a year ago, much better than the market return of around 7.6% (not including dividends) in the same period. If it can keep that out-performance up over the long term, investors will do very well! The longer term returns are positive, with the share price up 28% in three years.

The past week has proven to be lucrative for LingNan Eco&Culture-TourismLtd investors, so let's see if fundamentals drove the company's one-year performance.

Given that LingNan Eco&Culture-TourismLtd 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

LingNan Eco&Culture-TourismLtd actually shrunk its revenue over the last year, with a reduction of 48%. Despite the lack of revenue growth, the stock has returned a solid 30% the last twelve months. To us that means that there isn't a lot of correlation between the past revenue performance and the share price, but a closer look at analyst forecasts and the bottom line may well explain a lot.

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

If you are thinking of buying or selling LingNan Eco&Culture-TourismLtd stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's nice to see that LingNan Eco&Culture-TourismLtd shareholders have received a total shareholder return of 30% over the last year. That certainly beats the loss of about 3% per year over the last half decade. This makes us a little wary, but the business might have turned around its fortunes. 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. Case in point: We've spotted 4 warning signs for LingNan Eco&Culture-TourismLtd you should be aware of, and 3 of them are a bit concerning.

For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.

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.