By buying an index fund, investors can approximate the average market return. But many of us dare to dream of bigger returns, and build a portfolio ourselves. Just take a look at Sichuan Goldstone Asia Pharmaceutical Inc. (SZSE:300434), which is up 51%, over three years, soundly beating the market decline of 15% (not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 23% in the last year.

The past week has proven to be lucrative for Sichuan Goldstone Asia Pharmaceutical investors, so let's see if fundamentals drove the company's three-year performance.

See our latest analysis for Sichuan Goldstone Asia Pharmaceutical

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During three years of share price growth, Sichuan Goldstone Asia Pharmaceutical moved from a loss to profitability. So we would expect a higher share price over the period.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

Dive deeper into Sichuan Goldstone Asia Pharmaceutical's key metrics by checking this interactive graph of Sichuan Goldstone Asia Pharmaceutical's earnings, revenue and cash flow.

A Different Perspective

It's good to see that Sichuan Goldstone Asia Pharmaceutical has rewarded shareholders with a total shareholder return of 23% in the last twelve months. That gain is better than the annual TSR over five years, which is 4%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. Before deciding if you like the current share price, check how Sichuan Goldstone Asia Pharmaceutical scores on these 3 valuation metrics.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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.