Allwinnertech TechnologyLtd's earnings boost from unusual items may mislead investors about the company's true earnings power. Investors should note the 3 warning signs for Allwinnertech TechnologyLtd.

The growth in Allwinnertech TechnologyLtd's ROCE and its ability to profitably reinvest capital is seen as a positive sign. Investors are beginning to recognize these changes, as reflected in the stock's solid returns over the past five years.

Allwinnertech's high P/S ratio indicates stocks are trading at a premium despite modest growth expectations. The current growth doesn't seem to sustain the stock's high price, risking investments and possibly causing new investors to pay an unwarranted premium.