These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But you can significantly boost your returns by picking above-average stocks. For example, the Lisheng Sports (Shanghai) Co.,Ltd (SZSE:002858) share price is up 55% in the last 1 year, clearly besting the market decline of around 11% (not including dividends). So that should have shareholders smiling. The longer term returns have not been as good, with the stock price only 19% higher than it was three years ago.
The past week has proven to be lucrative for Lisheng Sports (Shanghai)Ltd investors, so let's see if fundamentals drove the company's one-year performance.
Check out our latest analysis for Lisheng Sports (Shanghai)Ltd
Given that Lisheng Sports (Shanghai)Ltd didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
Lisheng Sports (Shanghai)Ltd grew its revenue by 50% last year. That's well above most other pre-profit companies. The solid 55% share price gain goes down pretty well, but it's not necessarily as good as you might expect given the top notch revenue growth. If that's the case, now might be the time to take a close look at Lisheng Sports (Shanghai)Ltd. Human beings have trouble conceptualizing (and valuing) exponential growth. Is that what we're seeing here?
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
Take a more thorough look at Lisheng Sports (Shanghai)Ltd's financial health with this free report on its balance sheet.
A Different Perspective
It's good to see that Lisheng Sports (Shanghai)Ltd has rewarded shareholders with a total shareholder return of 55% in the last twelve months. That's better than the annualised return of 7% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. To that end, you should learn about the 3 warning signs we've spotted with Lisheng Sports (Shanghai)Ltd (including 1 which shouldn't be ignored) .
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.
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.