The simplest way to invest in stocks is to buy exchange traded funds. But you can significantly boost your returns by picking above-average stocks. To wit, the Port of Tauranga Limited (NZSE:POT) share price is 23% higher than it was a year ago, much better than the market decline of around 1.1% (not including dividends) in the same period. That’s a solid performance by our standards! The longer term returns have not been as good, with the stock price only 9.0% higher than it was three years ago.

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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To quote Buffett, ‘Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace…’ One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

Port of Tauranga was able to grow EPS by 1.9% in the last twelve months. This EPS growth is significantly lower than the 23% increase in the share price. This indicates that the market is now more optimistic about the stock.

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

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

As well as measuring the share price return, investors should also consider the total shareholder return (TSR). 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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for Port of Tauranga the TSR over the last 1 year was 27%, which is better than the share price return mentioned above. This is largely a result of its dividend payments!

It’s good to see that Port of Tauranga has rewarded shareholders with a total shareholder return of 27% in the last twelve months. And that does include the dividend. Since the one-year TSR is better than the five-year TSR (the latter coming in at 3% per year), it would seem that the stock’s performance has improved in recent times. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. Most investors take the time to check the data on insider transactions. You can click here to see if insiders have been buying or selling.