The worst result, after buying shares in a company (assuming no leverage), would be if you lose all the money you put in. But when you pick a company that is really flourishing, you can make more than 100%. For example, the M1 Kliniken AG (ETR:M12) share price has soared 142% in the last three years. How nice for those who held the stock! It’s also good to see the share price up 19% over the last quarter.

With that in mind, it’s worth seeing if the company’s underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.

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While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During three years of share price growth, M1 Kliniken achieved compound earnings per share growth of 40% per year. We note that the 34% yearly (average) share price gain isn’t too far from the EPS growth rate. Coincidence? Probably not. That suggests that the market sentiment around the company hasn’t changed much over that time. Au contraire, the share price change has arguably mimicked the EPS growth.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

It is of course excellent to see how M1 Kliniken has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling M1 Kliniken stock, you should check out this FREE detailed report on its balance sheet.

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). Whereas the share price return only reflects the change in the share price, the TSR includes the value of dividends (assuming they were reinvested) and the benefit of any discounted capital raising or spin-off. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. We note that for M1 Kliniken the TSR over the last 3 years was 158%, which is better than the share price return mentioned above. The dividends paid by the company have thusly boosted the total shareholder return.

We’re pleased to report that M1 Kliniken shareholders have received a total shareholder return of 16% over one year. That’s including the dividend. That’s better than the annualised return of 15% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It’s always interesting to track share price performance over the longer term. But to understand M1 Kliniken better, we need to consider many other factors. Case in point: We’ve spotted 1 warning sign for M1 Kliniken you should be aware of.