TradeGo FinTech (HKG:8017) shareholders YoY returns are lagging the company's 1,628% one-year earnings growth

Active investing isn't easy, but for those that do it, the aim is to find the best companies to buy, and to profit handsomely. While not every stock performs well, when investors win, they can win big. For example, TradeGo FinTech Limited (HKG:8017) has generated a beautiful 550% return in just a single year. The last week saw the share price soften some 17%. However, the longer term returns haven't been so impressive, with the stock up just 28% in the last three years. Anyone who held for that rewarding ride would probably be keen to talk about it.

Although TradeGo FinTech has shed HK$196m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

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To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.

During the last year TradeGo FinTech saw its earnings per share (EPS) increase strongly. We don't think the exact number is a good guide to the sustainable growth rate, but we do think this sort of increase is impressive. We are not surprised the share price is up. To us, inflection points like this are the best time to take a close look at a stock.

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

We know that TradeGo FinTech has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at TradeGo FinTech's financial health with this free report on its balance sheet.

A Different Perspective

We're pleased to report that TradeGo FinTech shareholders have received a total shareholder return of 550% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 25% per year), it would seem that the stock's performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. 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. To that end, you should learn about the 3 warning signs we've spotted with TradeGo FinTech (including 1 which is significant) .

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