The 9.8% return this week takes 4iG Nyrt's (BUSE:4IG) shareholders five-year gains to 60%

Passive investing in index funds can generate returns that roughly match the overall market. But the truth is, you can make significant gains if you buy good quality businesses at the right price. For example, the 4iG Nyrt. (BUSE:4IG) share price is up 44% in the last five years, slightly above the market return. Zooming in, the stock is up a respectable 11% in the last year.

Since it's been a strong week for 4iG Nyrt shareholders, let's have a look at trend of the longer term fundamentals.

View our latest analysis for 4iG Nyrt

4iG Nyrt isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

For the last half decade, 4iG Nyrt can boast revenue growth at a rate of 57% per year. That's well above most pre-profit companies. While the compound gain of 8% per year is good, it's not unreasonable given the strong revenue growth. If you think there could be more growth to come, now might be the time to take a close look at 4iG Nyrt. Opportunity lies where the market hasn't fully priced growth in the underlying business.

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

This free interactive report on 4iG Nyrt's balance sheet strength is a great place to start, if you want to investigate the stock further.

What About The Total Shareholder Return (TSR)?

We'd be remiss not to mention the difference between 4iG Nyrt's total shareholder return (TSR) and its share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Dividends have been really beneficial for 4iG Nyrt shareholders, and that cash payout contributed to why its TSR of 60%, over the last 5 years, is better than the share price return.

A Different Perspective

4iG Nyrt shareholders are up 11% for the year. But that return falls short of the market. On the bright side, that's still a gain, and it's actually better than the average return of 10% over half a decade It is possible that returns will improve along with the business fundamentals. 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. Case in point: We've spotted 1 warning sign for 4iG Nyrt you should be aware of.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.

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