The 13% return this week takes Busan Industrial's (KRX:011390) shareholders one-year gains to 38%

The simplest way to invest in stocks is to buy exchange traded funds. But you can significantly boost your returns by picking above-average stocks. To wit, the Busan Industrial Co., Ltd. (KRX:011390) share price is 37% higher than it was a year ago, much better than the market decline of around 12% (not including dividends) in the same period. That's a solid performance by our standards! On the other hand, longer term shareholders have had a tougher run, with the stock falling 25% in three years.

Since the stock has added ₩9.6b to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

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Given that Busan Industrial 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. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.

Busan Industrial actually shrunk its revenue over the last year, with a reduction of 12%. Despite the lack of revenue growth, the stock has returned a solid 37% the last twelve months. We can correlate the share price rise with revenue or profit growth, but it seems the market had previously expected weaker results, and sentiment around the stock is improving.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

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

A Different Perspective

It's nice to see that Busan Industrial shareholders have received a total shareholder return of 38% over the last year. And that does include the dividend. That certainly beats the loss of about 6% 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. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Even so, be aware that Busan Industrial is showing 3 warning signs in our investment analysis , and 2 of those shouldn't be ignored...

Of course Busan Industrial 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 South Korean 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.