Passive investing in index funds can generate returns that roughly match the overall market. But you can significantly boost your returns by picking above-average stocks. For example, the UMediC Group Berhad (KLSE:UMC) share price is up 39% in the last 1 year, clearly besting the market return of around 0.4% (not including dividends). If it can keep that out-performance up over the long term, investors will do very well! We'll need to follow UMediC Group Berhad for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.
With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.
See our latest analysis for UMediC Group Berhad
In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).
UMediC Group Berhad was able to grow EPS by 23% in the last twelve months. The share price gain of 39% certainly outpaced the EPS growth. So it's fair to assume the market has a higher opinion of the business than it a year ago.
You can see how EPS has changed over time in the image below (click on the chart to see the exact values).
We know that UMediC Group Berhad has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at UMediC Group Berhad's financial health with this free report on its balance sheet.
A Different Perspective
UMediC Group Berhad boasts a total shareholder return of 39% for the last year. And the share price momentum remains respectable, with a gain of 8.5% in the last three months. This suggests the company is continuing to win over new investors. 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. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for UMediC Group Berhad (of which 1 can't be ignored!) you should know about.
We will like UMediC Group Berhad better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Malaysian 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.