Zhejiang Jinke Tom Culture Industry (SZSE:300459) delivers shareholders notable 13% CAGR over 5 years, surging 4.6% in the last week alone

Generally speaking the aim of active stock picking is to find companies that provide returns that are superior to the market average. And in our experience, buying the right stocks can give your wealth a significant boost. To wit, the Zhejiang Jinke Tom Culture Industry share price has climbed 83% in five years, easily topping the market return of 5.3% (ignoring dividends). On the other hand, the more recent gains haven't been so impressive, with shareholders gaining just 55%.

After a strong gain in the past week, it's worth seeing if longer term returns have been driven by improving fundamentals.

Check out our latest analysis for Zhejiang Jinke Tom Culture Industry

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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.

Over half a decade, Zhejiang Jinke Tom Culture Industry managed to grow its earnings per share at 20% a year. We note, however, that extraordinary items have impacted earnings. This EPS growth is higher than the 13% average annual increase in the share price. So it seems the market isn't so enthusiastic about the stock these days.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

It's probably worth noting that the CEO is paid less than the median at similar sized companies. It's always worth keeping an eye on CEO pay, but a more important question is whether the company will grow earnings throughout the years. It might be well worthwhile taking a look at our free report on Zhejiang Jinke Tom Culture Industry's earnings, revenue and cash flow.

A Different Perspective

It's good to see that Zhejiang Jinke Tom Culture Industry has rewarded shareholders with a total shareholder return of 55% in the last twelve months. That's better than the annualised return of 13% 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. It's always interesting to track share price performance over the longer term. But to understand Zhejiang Jinke Tom Culture Industry better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Zhejiang Jinke Tom Culture Industry , and understanding them should be part of your investment process.

Of course Zhejiang Jinke Tom Culture Industry may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.