If you want to compound wealth in the stock market, you can do so by buying an index fund. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). To wit, the Jiyi Household International Holdings Limited (HKG:1495) share price is 30% higher than it was a year ago, much better than the market return of around -11% (not including dividends) in the same period. If it can keep that out-performance up over the long term, investors will do very well! However, the longer term returns haven’t been so impressive, with the stock up just 13% in the last three years.

See our latest analysis for Jiyi Household International Holdings

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it’s a weighing machine. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the last year, Jiyi Household International Holdings actually saw its earnings per share drop 43%. This means it’s unlikely the market is judging the company based on earnings growth. Since the change in EPS doesn’t seem to correlate with the change in share price, it’s worth taking a look at other metrics.

We think that the revenue growth of 27% could have some investors interested. We do see some companies suppress earnings in order to accelerate revenue growth.

You can see how revenue and earnings have changed over time in the image below, (click on the chart to see cashflow).

It’s good to see that there was some significant insider buying in the last three months. That’s a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. Dive deeper into the earnings by checking this interactive graph of Jiyi Household International Holdings’s earnings, revenue and cash flow.

What about the Total Shareholder Return (TSR)?

Investors should note that there’s a difference between Jiyi Household International Holdings’s total shareholder return (TSR) and its share price change, which we’ve covered above. The TSR attempts to capture the value of dividends (as if they were reinvested) and any discounted capital raisings offered to shareholders. We note that Jiyi Household International Holdings’s TSR, at 34% is higher than its share price rise of 30%. When you consider it hasn’t been paying a dividend, this data suggests shareholders may have had the opportunity to acquire attractively priced shares in a discounted capital raising.

A Different Perspective

We’re pleased to report that Jiyi Household International Holdings rewarded shareholders with a total shareholder return of 34% over the last year. That gain actually surpasses the 4.9% TSR it generated (per year) over three years. Given the track record of solid returns over varying time frames, it might be worth putting Jiyi Household International Holdings on your watchlist. If you want to research this stock further, the data on insider buying is an obvious place to start. You can click here to see who has been buying shares – and the price they paid.

Jiyi Household International Holdings is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. 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. Simply Wall St has no position in the stocks mentioned. Thank you for reading.