Long term investing can be life changing when you buy and hold the truly great businesses. While not every stock performs well, when investors win, they can win big. To wit, the ME Group International plc (LON:MEGP) share price has soared 345% over five years. If that doesn’t get you thinking about long term investing, we don’t know what will. And in the last week the share price has popped 9.3%. But this might be partly because the broader market had a good week last week, gaining 4.0%.

After a strong gain in the past week, it’s worth seeing if longer term returns have been driven by improving fundamentals.

Our free stock report includes 1 warning sign investors should be aware of before investing in ME Group International. Read for free now.

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.

Over half a decade, ME Group International managed to grow its earnings per share at 10% a year. This EPS growth is lower than the 35% average annual increase in the share price. This suggests that market participants hold the company in higher regard, these days. That’s not necessarily surprising considering the five-year track record of earnings growth.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

We know that ME Group International has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling ME Group International stock, you should check out this FREE detailed report on its balance sheet.

When looking at investment returns, it is important to consider the difference between total shareholder return (TSR) and share price return. The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. As it happens, ME Group International’s TSR for the last 5 years was 453%, which exceeds the share price return mentioned earlier. And there’s no prize for guessing that the dividend payments largely explain the divergence!

We’re pleased to report that ME Group International shareholders have received a total shareholder return of 21% over one year. That’s including the dividend. Having said that, the five-year TSR of 41% a year, is even better. 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. 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. Case in point: We’ve spotted 1 warning sign for ME Group International you should be aware of.