São Paulo Turismo's (BVMF:AHEB3) 61% YoY earnings expansion surpassed the shareholder returns over the past year

These days it's easy to simply buy an index fund, and your returns should (roughly) match the market. But you can significantly boost your returns by picking above-average stocks. To wit, the São Paulo Turismo S.A. (BVMF:AHEB3) share price is 58% higher than it was a year ago, much better than the market return of around 4.1% (not including dividends) in the same period. If it can keep that out-performance up over the long term, investors will do very well! It is also impressive that the stock is up 39% over three years, adding to the sense that it is a real winner.

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

View our latest analysis for São Paulo Turismo

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. One imperfect but simple way to consider how the market perception of a company has shifted is to compare the change in the earnings per share (EPS) with the share price movement.

During the last year São Paulo Turismo grew its earnings per share (EPS) by 61%. We note that the earnings per share growth isn't far from the share price growth (of 58%). So this implies that investor expectations of the company have remained pretty steady. It looks like the share price is responding to the EPS.

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

This free interactive report on São Paulo Turismo's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's nice to see that São Paulo Turismo shareholders have received a total shareholder return of 58% over the last year. That certainly beats the loss of about 0.8% per year over the last half decade. The long term loss makes us cautious, but the short term TSR gain certainly hints at a brighter future. 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 2 warning signs for São Paulo Turismo (1 makes us a bit uncomfortable) that you should be aware of.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Brazilian exchanges.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.