These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But investors can boost returns by picking market-beating companies to own shares in. For example, the Qtone Education Group (Guangdong) Co.,Ltd (SZSE:300359) share price is up 54% in the last 1 year, clearly besting the market decline of around 8.3% (not including dividends). If it can keep that out-performance up over the long term, investors will do very well! However, the stock hasn't done so well in the longer term, with the stock only up 29% in three years.

The past week has proven to be lucrative for Qtone Education Group (Guangdong)Ltd investors, so let's see if fundamentals drove the company's one-year performance.

See our latest analysis for Qtone Education Group (Guangdong)Ltd

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the last year Qtone Education Group (Guangdong)Ltd grew its earnings per share (EPS) by 44%. This EPS growth is reasonably close to the 54% increase in the share price. That suggests that the market sentiment around the company hasn't changed much over that time. We don't think its coincidental that the share price is growing at a similar rate to the earnings per share.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

Dive deeper into Qtone Education Group (Guangdong)Ltd's key metrics by checking this interactive graph of Qtone Education Group (Guangdong)Ltd's earnings, revenue and cash flow.

A Different Perspective

It's good to see that Qtone Education Group (Guangdong)Ltd has rewarded shareholders with a total shareholder return of 54% in the last twelve months. Since the one-year TSR is better than the five-year TSR (the latter coming in at 1.4% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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. For instance, we've identified 2 warning signs for Qtone Education Group (Guangdong)Ltd (1 is a bit concerning) that you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CN 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.