Tianjin Binhai Energy & DevelopmentLtd (SZSE:000695) investors are up 10% in the past week, but earnings have declined over the last five years

Stock pickers are generally looking for stocks that will outperform the broader market. And while active stock picking involves risks (and requires diversification) it can also provide excess returns. For example, long term Tianjin Binhai Energy & Development Co.,Ltd (SZSE:000695) shareholders have enjoyed a 22% share price rise over the last half decade, well in excess of the market decline of around 5.0% (not including dividends).

The past week has proven to be lucrative for Tianjin Binhai Energy & DevelopmentLtd investors, so let's see if fundamentals drove the company's five-year performance.

View our latest analysis for Tianjin Binhai Energy & DevelopmentLtd

While Tianjin Binhai Energy & DevelopmentLtd made a small profit, in the last year, we think that the market is probably more focussed on the top line growth at the moment. Generally speaking, we'd consider a stock like this alongside loss-making companies, simply because the quantum of the profit is so low. It would be hard to believe in a more profitable future without growing revenues.

Over the last half decade Tianjin Binhai Energy & DevelopmentLtd's revenue has actually been trending down at about 13% per year. Even though revenue hasn't increased, the stock actually gained 4%, per year, during the same period. It's probably worth checking other factors such as the profitability, to try to understand the share price action. It may not be reflecting the revenue.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Take a more thorough look at Tianjin Binhai Energy & DevelopmentLtd's financial health with this free report on its balance sheet.

A Different Perspective

While it's certainly disappointing to see that Tianjin Binhai Energy & DevelopmentLtd shares lost 15% throughout the year, that wasn't as bad as the market loss of 17%. Of course, the long term returns are far more important and the good news is that over five years, the stock has returned 4% for each year. In the best case scenario the last year is just a temporary blip on the journey to a brighter future. 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. Case in point: We've spotted 1 warning sign for Tianjin Binhai Energy & DevelopmentLtd you should be aware of.

But note: Tianjin Binhai Energy & DevelopmentLtd 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 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.