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. To wit, the WuXi Biologics (Cayman) Inc. (HKG:2269) share price is 14% higher than it was a year ago, much better than the market return of around -3.7% (not including dividends) in the same period. That's a solid performance by our standards! WuXi Biologics (Cayman) hasn't been listed for long, so it's still not clear if it is a long term winner.

See our latest analysis for WuXi Biologics (Cayman)

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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.

WuXi Biologics (Cayman) was able to grow EPS by 121% in the last twelve months. This EPS growth is significantly higher than the 14% increase in the share price. Therefore, it seems the market isn't as excited about WuXi Biologics (Cayman) as it was before. This could be an opportunity. Having said that, the market is still optimistic, given the P/E ratio of 137.41.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

We know that WuXi Biologics (Cayman) has improved its bottom line over the last three years, but what does the future have in store? It might be well worthwhile taking a look at our free report on how its financial position has changed over time.

A Different Perspective

WuXi Biologics (Cayman) shareholders should be happy with the total gain of 14% over the last twelve months. And the share price momentum remains respectable, with a gain of 39% in the last three months. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. If you would like to research WuXi Biologics (Cayman) in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.

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 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.