We think all investors should try to buy and hold high quality multi-year winners. And highest quality companies can see their share prices grow by huge amounts. Just think about the savvy investors who held Waberer’s International Nyrt. (BST:3WB) shares for the last five years, while they gained 520%. This just goes to show the value creation that some businesses can achieve. It’s also good to see the share price up 29% over the last quarter. But this could be related to the strong market, which is up 12% in the last three months. We love happy stories like this one. The company should be really proud of that performance!

So let’s assess the underlying fundamentals over the last 5 years and see if they’ve moved in lock-step with shareholder returns.

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There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company’s share price and its earnings per share (EPS).

During the last half decade, Waberer’s International Nyrt became profitable. Sometimes, the start of profitability is a major inflection point that can signal fast earnings growth to come, which in turn justifies very strong share price gains.

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

Before buying or selling a stock, we always recommend a close examination of historic growth trends, available here.

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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 Waberer’s International Nyrt the TSR over the last 5 years was 573%, 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 Waberer’s International Nyrt shareholders have received a total shareholder return of 30% over one year. And that does include the dividend. However, that falls short of the 46% TSR per annum it has made for shareholders, each year, over five years. The pessimistic view would be that be that the stock has its best days behind it, but on the other hand the price might simply be moderating while the business itself continues to execute. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we’ve spotted 1 warning sign for Waberer’s International Nyrt you should know about.