Earnings growth outpaced the 18% return delivered to Brisanet Participações (BVMF:BRIT3) shareholders over the last year

If you want to compound wealth in the stock market, you can do so by buying an index fund. But investors can boost returns by picking market-beating companies to own shares in. For example, the Brisanet Participações S.A. (BVMF:BRIT3) share price is up 16% in the last 1 year, clearly besting the market decline of around 4.1% (not including dividends). That's a solid performance by our standards! Brisanet Participações hasn't been listed for long, so it's still not clear if it is a long term winner.

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

View our latest analysis for Brisanet Participações

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. 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.

Brisanet Participações boasted truly magnificent EPS growth in the last year. We don't think the exact number is a good guide to the sustainable growth rate, but we do think this sort of increase is impressive. So we're unsurprised to see the share price gaining ground. Strong growth like this can be evidence of a fundamental inflection point in the business, making it a good time to investigate the stock more closely.

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

We know that Brisanet Participações has improved its bottom line lately, but is it going to grow revenue? You could check out this free report showing analyst revenue forecasts.

A Different Perspective

It's nice to see that Brisanet Participações shareholders have gained 18% over the last year, including dividends. And the share price momentum remains respectable, with a gain of 85% in the last three months. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. It's always interesting to track share price performance over the longer term. But to understand Brisanet Participações better, we need to consider many other factors. Take risks, for example - Brisanet Participações has 2 warning signs we think you should be aware of.

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 Brazilian 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.