Passive investing in index funds can generate returns that roughly match the overall market. But if you pick the right individual stocks, you could make more than that. To wit, the Xaar plc (LON:XAR) share price is 39% higher than it was a year ago, much better than the market return of around 15% (not including dividends) in the same period. If it can keep that out-performance up over the long term, investors will do very well! Zooming out, the stock is actually down 26% in the last three years.

So let’s assess the underlying fundamentals over the last 1 year and see if they’ve moved in lock-step with shareholder returns.

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Xaar 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. Generally speaking, companies without profits are expected to grow revenue every year, and at a good clip. That’s because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Over the last twelve months, Xaar’s revenue grew by 3.0%. That’s not a very high growth rate considering it doesn’t make profits. In keeping with the revenue growth, the share price gained 39% in that time. That’s not a standout result, but it is solid – much like the level of revenue growth. It could be worth keeping an eye on this one, especially if growth accelerates.

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

This free interactive report on Xaar’s balance sheet strength is a great place to start, if you want to investigate the stock further.

It’s nice to see that Xaar shareholders have received a total shareholder return of 39% over the last year. There’s no doubt those recent returns are much better than the TSR loss of 0.8% per year over five years. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. Before spending more time on Xaar it might be wise to click here to see if insiders have been buying or selling shares.

If you are like me, then you will not want to miss this free list of undervalued small caps that insiders are buying.

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