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. For example, the Piesat Information Technology Co., Ltd. (SHSE:688066) share price is up 59% in the last 1 year, clearly besting the market decline of around 18% (not including dividends). That's a solid performance by our standards! Also impressive, the stock is up 33% over three years, making long term shareholders happy, too.

While the stock has fallen 3.3% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

Check out our latest analysis for Piesat Information Technology

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the last year Piesat Information Technology grew its earnings per share (EPS) by 78%. It's fair to say that the share price gain of 59% did not keep pace with the EPS growth. So it seems like the market has cooled on Piesat Information Technology, despite the growth. Interesting. Of course, with a P/E ratio of 66.41, the market remains optimistic.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

We know that Piesat Information Technology has improved its bottom line lately, but is it going to grow revenue? If you're interested, you could check this free report showing consensus revenue forecasts.

A Different Perspective

We're pleased to report that Piesat Information Technology rewarded shareholders with a total shareholder return of 59% over the last year. That includes the value of the dividend. That gain actually surpasses the 10% TSR it generated (per year) over three years. The improving returns to shareholders suggests the stock is becoming more popular with time. It's always interesting to track share price performance over the longer term. But to understand Piesat Information Technology better, we need to consider many other factors. Even so, be aware that Piesat Information Technology is showing 1 warning sign in our investment analysis , you should know about...

But note: Piesat Information Technology may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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.