The most you can lose on any stock (assuming you don’t use leverage) is 100% of your money. But in contrast you can make much more than 100% if the company does well. For example, the Western Digital Corporation (NASDAQ:WDC) share price has soared 228% in the last three years. Most would be happy with that. Also pleasing for shareholders was the 69% gain in the last three months.

So let’s assess the underlying fundamentals over the last 3 years and see if they’ve moved in lock-step with shareholder returns.

Trump has pledged to “unleash” American oil and gas and these 15 US stocks have developments that are poised to benefit.

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. 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.

Western Digital became profitable within the last three years. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

We know that Western Digital has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Western Digital will grow revenue in the future.

It is important to consider the total shareholder return, as well as the share price return, for any given stock. 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. As it happens, Western Digital’s TSR for the last 3 years was 336%, which exceeds the share price return mentioned earlier. This is largely a result of its dividend payments!

We’re pleased to report that Western Digital shareholders have received a total shareholder return of 104% over one year. Of course, that includes the dividend. That’s better than the annualised return of 32% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. For instance, we’ve identified 3 warning signs for Western Digital that you should be aware of.