Passive investing in index funds can generate returns that roughly match the overall market. But if you pick the right individual stocks, you could make more than that. For example, the Tuan Sing Holdings Limited (SGX:T24) share price is up 33% in the last 1 year, clearly besting the market return of around 21% (not including dividends). So that should have shareholders smiling. However, the longer term returns haven’t been so impressive, with the stock up just 6.6% in the last three years.

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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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. 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 year Tuan Sing Holdings grew its earnings per share, moving from a loss to a profit.

When a company is just on the edge of profitability it can be well worth considering other metrics in order to more precisely gauge growth (and therefore understand share price movements).

Unfortunately Tuan Sing Holdings’ fell 41% over twelve months. So using a snapshot of key business metrics doesn’t give us a good picture of why the market is bidding up the stock.

The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).

Take a more thorough look at Tuan Sing Holdings’ financial health with this free report on its balance sheet.

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 Tuan Sing Holdings the TSR over the last 1 year was 36%, which is better than the share price return mentioned above. And there’s no prize for guessing that the dividend payments largely explain the divergence!

It’s good to see that Tuan Sing Holdings has rewarded shareholders with a total shareholder return of 36% in the last twelve months. And that does include the dividend. That gain is better than the annual TSR over five years, which is 4%. Therefore it seems like sentiment around the company has been positive lately. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. Take risks, for example – Tuan Sing Holdings has 3 warning signs (and 2 which make us uncomfortable) we think you should know about.