These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But if you pick the right individual stocks, you could make more than that. To wit, the Kunshan Dongwei Technology Co.,Ltd. (SHSE:688700) share price is 47% higher than it was a year ago, much better than the market decline of around 8.1% (not including dividends) in the same period. So that should have shareholders smiling. Kunshan Dongwei TechnologyLtd hasn't been listed for long, so it's still not clear if it is a long term winner.

Since the stock has added CN¥1.2b to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

View our latest analysis for Kunshan Dongwei TechnologyLtd

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During the last year Kunshan Dongwei TechnologyLtd grew its earnings per share (EPS) by 34%. The share price gain of 47% certainly outpaced the EPS growth. This indicates that the market is now more optimistic about the stock. The fairly generous P/E ratio of 76.29 also points to this optimism.

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

We know that Kunshan Dongwei TechnologyLtd has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Kunshan Dongwei TechnologyLtd will grow revenue in the future.

A Different Perspective

Kunshan Dongwei TechnologyLtd boasts a total shareholder return of 49% for the last year (that includes the dividends) . A substantial portion of that gain has come in the last three months, with the stock up 22% in that time. This suggests the company is continuing to win over new investors. 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. Take risks, for example - Kunshan Dongwei TechnologyLtd has 2 warning signs (and 1 which is significant) we think you should know about.

For those who like to find winning investments this free list of growing 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 CN 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.