Shenzhen Fine Made Electronics Group (SZSE:300671) shareholder returns have been favorable, earning 73% in 5 years

Generally speaking the aim of active stock picking is to find companies that provide returns that are superior to the market average. Buying under-rated businesses is one path to excess returns. For example, long term Shenzhen Fine Made Electronics Group Co., Ltd. (SZSE:300671) shareholders have enjoyed a 72% share price rise over the last half decade, well in excess of the market return of around 14% (not including dividends).

Since it's been a strong week for Shenzhen Fine Made Electronics Group shareholders, let's have a look at trend of the longer term fundamentals.

View our latest analysis for Shenzhen Fine Made Electronics Group

Because Shenzhen Fine Made Electronics Group made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. 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.

For the last half decade, Shenzhen Fine Made Electronics Group can boast revenue growth at a rate of 5.0% per year. Put simply, that growth rate fails to impress. The modest growth is probably broadly reflected in the share price, which is up 11%, per year over 5 years. We'd be looking for the underlying business to grow revenue a bit faster.

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

Take a more thorough look at Shenzhen Fine Made Electronics Group's financial health with this free report on its balance sheet.

A Different Perspective

We regret to report that Shenzhen Fine Made Electronics Group shareholders are down 38% for the year. Unfortunately, that's worse than the broader market decline of 9.7%. Having said that, it's inevitable that some stocks will be oversold in a falling market. The key is to keep your eyes on the fundamental developments. Longer term investors wouldn't be so upset, since they would have made 12%, each year, over five years. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For instance, we've identified 1 warning sign for Shenzhen Fine Made Electronics Group that you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

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.