Xinjiang Youhao(Group)Co.Ltd's (SHSE:600778) growing losses don't faze investors as the stock surges 26% this past week

One simple way to benefit from the stock market is to buy an index fund. But if you choose individual stocks with prowess, you can make superior returns. Just take a look at Xinjiang Youhao(Group)Co.,Ltd (SHSE:600778), which is up 22%, over three years, soundly beating the market decline of 30% (not including dividends).

On the back of a solid 7-day performance, let's check what role the company's fundamentals have played in driving long term shareholder returns.

Check out our latest analysis for Xinjiang Youhao(Group)Co.Ltd

Xinjiang Youhao(Group)Co.Ltd wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because it's hard to be confident a company will be sustainable if revenue growth is negligible, and it never makes a profit.

Xinjiang Youhao(Group)Co.Ltd actually saw its revenue drop by 9.6% per year over three years. The revenue growth might be lacking but the share price has gained 7% each year in that time. If the company is cutting costs profitability could be on the horizon, but the revenue decline is a prima facie concern.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

This free interactive report on Xinjiang Youhao(Group)Co.Ltd's balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

Xinjiang Youhao(Group)Co.Ltd shareholders are down 14% over twelve months, which isn't far from the market return of -14%. The silver lining is that longer term investors would have made a total return of 1.9% per year over half a decade. If the fundamental data remains strong, and the share price is simply down on sentiment, then this could be an opportunity worth investigating. It's always interesting to track share price performance over the longer term. But to understand Xinjiang Youhao(Group)Co.Ltd better, we need to consider many other factors. Even so, be aware that Xinjiang Youhao(Group)Co.Ltd is showing 2 warning signs in our investment analysis , you should know about...

If you are like me, then you will not want to miss this free list of undervalued small caps 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 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.