Despite the downward trend in earnings at Semiconductor Manufacturing International (HKG:981) the stock spikes 20%, bringing one-year gains to 196%

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. On the other hand, if you find a high quality business to buy (at the right price) you can more than double your money! Take, for example Semiconductor Manufacturing International Corporation (HKG:981). Its share price is already up an impressive 196% in the last twelve months. Also pleasing for shareholders was the 69% gain in the last three months. Looking back further, the stock price is 141% higher than it was three years ago.

The past week has proven to be lucrative for Semiconductor Manufacturing International investors, so let's see if fundamentals drove the company's one-year performance.

View our latest analysis for Semiconductor Manufacturing International

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Over the last twelve months, Semiconductor Manufacturing International actually shrank its EPS by 50%.

Given the share price gain, we doubt the market is measuring progress with EPS. Indeed, when EPS is declining but the share price is up, it often means the market is considering other factors.

However the year on year revenue growth of 20% would help. We do see some companies suppress earnings in order to accelerate revenue growth.

You can see below how earnings and revenue have changed over time (discover the exact values by clicking on the image).

Semiconductor Manufacturing International is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. Given we have quite a good number of analyst forecasts, it might be well worth checking out this free chart depicting consensus estimates.

A Different Perspective

It's good to see that Semiconductor Manufacturing International has rewarded shareholders with a total shareholder return of 196% in the last twelve months. That's better than the annualised return of 23% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Semiconductor Manufacturing International better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 3 warning signs for Semiconductor Manufacturing International you should know about.

We will like Semiconductor Manufacturing International better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) 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 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.