Guangzhou Grandbuy (SZSE:002187) delivers shareholders 23% return over 1 year, surging 12% in the last week alone

These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But you can significantly boost your returns by picking above-average stocks. For example, the Guangzhou Grandbuy Co., Ltd. (SZSE:002187) share price is up 22% in the last 1 year, clearly besting the market return of around 6.4% (not including dividends). That's a solid performance by our standards! Zooming out, the stock is actually down 12% in the last three years.

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

View our latest analysis for Guangzhou Grandbuy

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Guangzhou Grandbuy went from making a loss to reporting a profit, in the last year.

While it's good to see positive EPS of CN¥0.083 this year, the loss wasn't too bad last year. We'd argue the positive share price reflects the move to profitability. Inflection points like this can be a great time to take a closer look at a company.

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

It might be well worthwhile taking a look at our free report on Guangzhou Grandbuy's earnings, revenue and cash flow.

A Different Perspective

It's good to see that Guangzhou Grandbuy has rewarded shareholders with a total shareholder return of 23% in the last twelve months. Of course, that includes the dividend. That certainly beats the loss of about 0.9% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. It's always interesting to track share price performance over the longer term. But to understand Guangzhou Grandbuy better, we need to consider many other factors. For example, we've discovered 3 warning signs for Guangzhou Grandbuy (2 are potentially serious!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Chinese exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.