If you want to compound wealth in the stock market, you can do so by buying an index fund. But you can significantly boost your returns by picking above-average stocks. To wit, the Shenzhen XFH Technology Co.,Ltd (SZSE:300890) share price is 11% higher than it was a year ago, much better than the market decline of around 7.2% (not including dividends) in the same period. That's a solid performance by our standards! We'll need to follow Shenzhen XFH TechnologyLtd for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

The past week has proven to be lucrative for Shenzhen XFH TechnologyLtd investors, so let's see if fundamentals drove the company's one-year performance.

See our latest analysis for Shenzhen XFH TechnologyLtd

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 last year Shenzhen XFH TechnologyLtd grew its earnings per share (EPS) by 133%. It's fair to say that the share price gain of 11% did not keep pace with the EPS growth. Therefore, it seems the market isn't as excited about Shenzhen XFH TechnologyLtd as it was before. This could be an opportunity.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

This free interactive report on Shenzhen XFH TechnologyLtd's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

Shenzhen XFH TechnologyLtd boasts a total shareholder return of 11% for the last year. And the share price momentum remains respectable, with a gain of 48% in the last three months. This suggests the company is continuing to win over new investors. 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 example, we've discovered 2 warning signs for Shenzhen XFH TechnologyLtd (1 is concerning!) that you should be aware of before investing here.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on CN exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.