When we invest, we're generally looking for stocks that outperform the market average. And while active stock picking involves risks (and requires diversification) it can also provide excess returns. To wit, the Chengdu Xinzhu Road&Bridge MachineryLTD share price has climbed 34% in five years, easily topping the market return of 12% (ignoring dividends). On the other hand, the more recent gains haven't been so impressive, with shareholders gaining just 6.3%.

Although Chengdu Xinzhu Road&Bridge MachineryLTD has shed CN¥423m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

Chengdu Xinzhu Road&Bridge MachineryLTD wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally hope to see good revenue growth. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

For the last half decade, Chengdu Xinzhu Road&Bridge MachineryLTD can boast revenue growth at a rate of 2.7% per year. That's not a very high growth rate considering the bottom line. The modest growth is probably broadly reflected in the share price, which is up 6%, per year over 5 years. The business could be one worth watching but we generally prefer faster revenue growth.

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

If you are thinking of buying or selling Chengdu Xinzhu Road&Bridge MachineryLTD stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Chengdu Xinzhu Road&Bridge MachineryLTD provided a TSR of 6.3% over the last twelve months. But that return falls short of the market. On the bright side, that's still a gain, and it's actually better than the average return of 6% over half a decade This could indicate that the company is winning over new investors, as it pursues its strategy. It's always interesting to track share price performance over the longer term. But to understand Chengdu Xinzhu Road&Bridge MachineryLTD better, we need to consider many other factors. For example, we've discovered 1 warning sign for Chengdu Xinzhu Road&Bridge MachineryLTD that you should be aware of before investing here.

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.