The most you can lose on any stock (assuming you don’t use leverage) is 100% of your money. But on a lighter note, a good company can see its share price rise well over 100%. Long term Capral Limited (ASX:CAA) shareholders would be well aware of this, since the stock is up 220% in five years. It’s even up 6.0% in the last week.

Let’s take a look at the underlying fundamentals over the longer term, and see if they’ve been consistent with shareholders returns.

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While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the five years of share price growth, Capral moved from a loss to profitability. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

The company’s earnings per share (over time) is depicted in the image below (click to see the exact numbers).

Dive deeper into Capral’s key metrics by checking this interactive graph of Capral’s earnings, revenue and cash flow.

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. Arguably, the TSR gives a more comprehensive picture of the return generated by a stock. In the case of Capral, it has a TSR of 345% for the last 5 years. That exceeds its share price return that we previously mentioned. This is largely a result of its dividend payments!

Capral shareholders gained a total return of 1.4% during the year. But that was short of the market average. If we look back over five years, the returns are even better, coming in at 35% per year for five years. It’s quite possible the business continues to execute with prowess, even as the share price gains are slowing. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we’ve spotted 2 warning signs for Capral you should know about.