By buying an index fund, you can roughly match the market return with ease. But if you pick the right individual stocks, you could make more than that. For example, the ShenzhenJingQuanHua Electronics Co.,Ltd. (SZSE:002885) share price is up 42% in the last three years, clearly besting the market decline of around 18% (not including dividends).

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

While ShenzhenJingQuanHua ElectronicsLtd made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. As a general rule, we think this kind of company is more comparable to loss-making stocks, since the actual profit is so low. It would be hard to believe in a more profitable future without growing revenues.

ShenzhenJingQuanHua ElectronicsLtd's revenue trended up 15% each year over three years. That's pretty nice growth. The share price gain of 12% per year shows that the market is paying attention to this growth. If that's the case, then it could be well worth while to research the growth trajectory. Keep in mind that the strength of the balance sheet impacts the options open to the company.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

This free interactive report on ShenzhenJingQuanHua ElectronicsLtd's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Investors in ShenzhenJingQuanHua ElectronicsLtd had a tough year, with a total loss of 25% (including dividends), against a market gain of about 3.3%. Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. Regrettably, last year's performance caps off a bad run, with the shareholders facing a total loss of 0.3% per year over five years. Generally speaking long term share price weakness can be a bad sign, though contrarian investors might want to research the stock in hope of a turnaround. 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 example, we've discovered 2 warning signs for ShenzhenJingQuanHua ElectronicsLtd that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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.