These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). For example, the IQE plc (LON:IQE) share price is up 69% in the last 1 year, clearly besting the market return of around 7.8% (not including dividends). That's a solid performance by our standards! On the other hand, longer term shareholders have had a tougher run, with the stock falling 32% in three years.

Since it's been a strong week for IQE shareholders, let's have a look at trend of the longer term fundamentals.

Check out our latest analysis for IQE

IQE wasn't profitable in the last twelve months, it is unlikely we'll see a strong correlation between its share price and its earnings per share (EPS). Arguably revenue is our next best option. When a company doesn't make profits, we'd generally hope to see good revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

In the last year IQE saw its revenue shrink by 31%. The stock is up 69% in that time, a fine performance given the revenue drop. To us that means that there isn't a lot of correlation between the past revenue performance and the share price, but a closer look at analyst forecasts and the bottom line may well explain a lot.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

We consider it positive that insiders have made significant purchases in the last year. Even so, future earnings will be far more important to whether current shareholders make money. So it makes a lot of sense to check out what analysts think IQE will earn in the future (free profit forecasts).

A Different Perspective

It's good to see that IQE has rewarded shareholders with a total shareholder return of 69% in the last twelve months. Notably the five-year annualised TSR loss of 8% per year compares very unfavourably with the recent share price performance. This makes us a little wary, but the business might have turned around its fortunes. It's always interesting to track share price performance over the longer term. But to understand IQE better, we need to consider many other factors. Take risks, for example - IQE has 3 warning signs (and 2 which are a bit unpleasant) we think you should know about.

IQE is not the only stock that insiders are buying. For those who like to find lesser know companies this free list of growing companies with recent insider purchasing, could be just the ticket.