Passive investing in index funds can generate returns that roughly match the overall market. But in our experience, buying the right stocks can give your wealth a significant boost. For example, the Zhongtian International Limited (HKG:2379) share price is up 22% in the last five years, slightly above the market return. In comparison, the share price is down 15% in a year.
Check out our latest analysis for Zhongtian International
Zhongtian International isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
For the last half decade, Zhongtian International can boast revenue growth at a rate of 38% per year. Even measured against other revenue-focussed companies, that's a good result. While the compound gain of 4.1% per year is good, it's not unreasonable given the strong revenue growth. If you think there could be more growth to come, now might be the time to take a close look at Zhongtian International. Opportunity lies where the market hasn't fully priced growth in the underlying business.
You can see how revenue and earnings have changed over time in the image below, (click on the chart to see cashflow).
If you are thinking of buying or selling Zhongtian International stock, you should check out this FREE detailed report on its balance sheet.
A Different Perspective
We regret to report that Zhongtian International shareholders are down 15% for the year. Unfortunately, that's worse than the broader market decline of 3.4%. However, it could simply be that the share price has been impacted by broader market jitters. It might be worth keeping an eye on the fundamentals, in case there's a good opportunity. On the bright side, long term shareholders have made money, with a gain of 4.1% per year over half a decade. It could be that the recent sell-off is an opportunity, so it may be worth checking the fundamental data for signs of a long term growth trend. You could get a better understanding of Zhongtian International's growth by checking out this more detailed historical graph of earnings, revenue and cash flow.
But note: Zhongtian International may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).
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.