Xuzhou Handler Special Vehicle (SZSE:300201) pulls back 7.7% this week, but still delivers shareholders decent 20% CAGR over 3 years

By buying an index fund, investors can approximate the average market return. But if you choose individual stocks with prowess, you can make superior returns. For example, Xuzhou Handler Special Vehicle Co., Ltd (SZSE:300201) shareholders have seen the share price rise 70% over three years, well in excess of the market decline (5.2%, not including dividends). On the other hand, the returns haven't been quite so good recently, with shareholders up just 17%, including dividends.

While the stock has fallen 7.7% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

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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.

Xuzhou Handler Special Vehicle became profitable within the last three years. That would generally be considered a positive, so we'd expect the share price to be up.

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

Dive deeper into Xuzhou Handler Special Vehicle's key metrics by checking this interactive graph of Xuzhou Handler Special Vehicle's earnings, revenue and cash flow.

A Different Perspective

Xuzhou Handler Special Vehicle's TSR for the year was broadly in line with the market average, at 17%. Most would be happy with a gain, and it helps that the year's return is actually better than the average return over five years, which was 11%. Even if the share price growth slows down from here, there's a good chance that this is business worth watching in the long term. 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. Take risks, for example - Xuzhou Handler Special Vehicle has 1 warning sign we think you should be aware of.

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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.