The 12% return this week takes Beijing Hualian Department Store's (SZSE:000882) shareholders one-year gains to 51%

The simplest way to invest in stocks is to buy exchange traded funds. But investors can boost returns by picking market-beating companies to own shares in. For example, the Beijing Hualian Department Store Co., Ltd (SZSE:000882) share price is up 51% in the last 1 year, clearly besting the market return of around 3.9% (not including dividends). So that should have shareholders smiling. However, the longer term returns haven't been so impressive, with the stock up just 28% in the last three years.

Since the stock has added CN¥739m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

Check out our latest analysis for Beijing Hualian Department Store

Given that Beijing Hualian Department Store only made minimal earnings in the last twelve months, we'll focus on revenue to gauge its business development. 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.

In the last year Beijing Hualian Department Store saw its revenue shrink by 2.1%. Despite the lack of revenue growth, the stock has returned a solid 51% the last twelve months. To us that means that there isn't a lot of correlation between the past revenue performance and the share price, but a closer look at analyst forecasts and the bottom line may well explain a lot.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

It's good to see that Beijing Hualian Department Store has rewarded shareholders with a total shareholder return of 51% in the last twelve months. That's better than the annualised return of 1.6% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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 be aware of the 1 warning sign we've spotted with Beijing Hualian Department Store .

We will like Beijing Hualian Department Store better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

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.