Intercede Group plc (LON:IGP) shareholders have seen the share price descend 22% over the month. But that doesn’t change the fact that the returns over the last five years have been very strong. It’s fair to say most would be happy with 241% the gain in that time. Generally speaking the long term returns will give you a better idea of business quality than short periods can. Of course, that doesn’t necessarily mean it’s cheap now.

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

View our latest analysis for Intercede Group

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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 five years of share price growth, Intercede Group achieved compound earnings per share (EPS) growth of 58% per year. This EPS growth is higher than the 28% average annual increase in the share price. Therefore, it seems the market has become relatively pessimistic about the company.

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

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

It’s good to see that Intercede Group has rewarded shareholders with a total shareholder return of 37% in the last twelve months. That’s better than the annualised return of 28% over half a decade, implying that the company is doing better recently. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. 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 for instance, the ever-present spectre of investment risk. We’ve identified 1 warning sign with Intercede Group , and understanding them should be part of your investment process.

For those who like to find winning investments this free list of undervalued companies with recent insider purchasing, could be just the ticket.