BOE HC SemiTek (SZSE:300323) pulls back 3.9% this week, but still delivers shareholders respectable 48% return over 1 year

If you want to compound wealth in the stock market, you can do so by buying an index fund. But investors can boost returns by picking market-beating companies to own shares in. For example, the BOE HC SemiTek Corporation (SZSE:300323) share price is up 48% in the last 1 year, clearly besting the market return of around 13% (not including dividends). That's a solid performance by our standards! Unfortunately the longer term returns are not so good, with the stock falling 8.9% in the last three years.

While the stock has fallen 3.9% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

View our latest analysis for BOE HC SemiTek

Given that BOE HC SemiTek didn't make a profit in the last twelve months, we'll focus on revenue growth to form a quick view of its business development. When a company doesn't make profits, we'd generally hope to see good revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one would hope for good top-line growth to make up for the lack of earnings.

In the last year BOE HC SemiTek saw its revenue grow by 50%. That's a head and shoulders above most loss-making companies. While the share price gain of 48% over twelve months is pretty tasty, you might argue it doesn't fully reflect the strong revenue growth. So quite frankly it could be a good time to investigate BOE HC SemiTek in some detail. Human beings have trouble conceptualizing (and valuing) exponential growth. Is that what we're seeing here?

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

Take a more thorough look at BOE HC SemiTek's financial health with this free report on its balance sheet.

A Different Perspective

We're pleased to report that BOE HC SemiTek shareholders have received a total shareholder return of 48% over one year. That's better than the annualised return of 2% 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 BOE HC SemiTek better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for BOE HC SemiTek 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.