By buying an index fund, you can roughly match the market return with ease. But if you choose individual stocks with prowess, you can make superior returns. For example, the Shenzhen Genvict Technologies Co., Ltd. (SZSE:002869) share price is up 66% in the last three years, clearly besting the market decline of around 31% (not including dividends).

Although Shenzhen Genvict Technologies has shed CN¥477m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

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 three years of share price growth, Shenzhen Genvict Technologies actually saw its earnings per share (EPS) drop 50% per year.

So we doubt that the market is looking to EPS for its main judge of the company's value. Therefore, we think it's worth considering other metrics as well.

Languishing at just 0.4%, we doubt the dividend is doing much to prop up the share price. The revenue drop of 25% is as underwhelming as some politicians. The only thing that's clear is there is low correlation between Shenzhen Genvict Technologies' share price and its historic fundamental data. Further research may be required!

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

Take a more thorough look at Shenzhen Genvict Technologies' financial health with this free report on its balance sheet.

A Different Perspective

We're pleased to report that Shenzhen Genvict Technologies shareholders have received a total shareholder return of 56% over one year. And that does include the dividend. That certainly beats the loss of about 5% 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. For instance, we've identified 3 warning signs for Shenzhen Genvict Technologies (2 can't be ignored) that you should be aware of.

We will like Shenzhen Genvict Technologies better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider 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.