If You Had Bought Fusen Pharmaceutical (HKG:1652) Shares A Year Ago You'd Have Earned 34% Returns

These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But if you pick the right individual stocks, you could make more than that. To wit, the Fusen Pharmaceutical Company Limited (HKG:1652) share price is 34% higher than it was a year ago, much better than the market return of around 8.2% (not including dividends) in the same period. So that should have shareholders smiling. Fusen Pharmaceutical hasn't been listed for long, so it's still not clear if it is a long term winner.

Check out our latest analysis for Fusen Pharmaceutical

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the last year, Fusen Pharmaceutical actually saw its earnings per share drop 10%.

Given the share price gain, we doubt the market is measuring progress with EPS. Therefore, it seems likely that investors are putting more weight on metrics other than EPS, at the moment.

We doubt the modest 0.1% dividend yield is doing much to support the share price. However the year on year revenue growth of 19% would help. Many businesses do go through a phase where they have to forgo some profits to drive business development, and sometimes its for the best.

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

We're pleased to report that the CEO is remunerated more modestly than most CEOs at similarly capitalized companies. But while CEO remuneration is always worth checking, the really important question is whether the company can grow earnings going forward. This free interactive report on Fusen Pharmaceutical's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

Fusen Pharmaceutical boasts a total shareholder return of 34% for the last year (that includes the dividends) . A substantial portion of that gain has come in the last three months, with the stock up 62% in that time. This suggests the company is continuing to win over new investors. It's always interesting to track share price performance over the longer term. But to understand Fusen Pharmaceutical better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Fusen Pharmaceutical (including 1 which is doesn't sit too well with us) .

Of course Fusen Pharmaceutical may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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

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This article by Simply Wall St is general in nature. 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.
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