The most you can lose on any stock (assuming you don’t use leverage) is 100% of your money. But when you pick a company that is really flourishing, you can make more than 100%. Long term W.W. Grainger, Inc. (NYSE:GWW) shareholders would be well aware of this, since the stock is up 132% in five years.

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.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

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…’ 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.

Over half a decade, W.W. Grainger managed to grow its earnings per share at 25% a year. The EPS growth is more impressive than the yearly share price gain of 18% over the same period. So it seems the market isn’t so enthusiastic about the stock these days.

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

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

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. It’s fair to say that the TSR gives a more complete picture for stocks that pay a dividend. As it happens, W.W. Grainger’s TSR for the last 5 years was 145%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

While the broader market gained around 13% in the last year, W.W. Grainger shareholders lost 20% (even including dividends). Even the share prices of good stocks drop sometimes, but we want to see improvements in the fundamental metrics of a business, before getting too interested. On the bright side, long term shareholders have made money, with a gain of 20% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. It’s always interesting to track share price performance over the longer term. But to understand W.W. Grainger better, we need to consider many other factors. Even so, be aware that W.W. Grainger is showing 1 warning sign in our investment analysis , you should know about…