Tornado Global Hydrovacs (CVE:TGH) delivers shareholders incredible 38% CAGR over 5 years, surging 11% in the last week alone

For many, the main point of investing in the stock market is to achieve spectacular returns. While the best companies are hard to find, but they can generate massive returns over long periods. Just think about the savvy investors who held Tornado Global Hydrovacs Ltd. (CVE:TGH) shares for the last five years, while they gained 392%. If that doesn't get you thinking about long term investing, we don't know what will. On top of that, the share price is up 87% in about a quarter.

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 Tornado Global Hydrovacs

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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.

During the five years of share price growth, Tornado Global Hydrovacs moved from a loss to profitability. That kind of transition can be an inflection point that justifies a strong share price gain, just as we have seen here.

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

It is of course excellent to see how Tornado Global Hydrovacs has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at Tornado Global Hydrovacs' financial health with this free report on its balance sheet.

A Different Perspective

It's nice to see that Tornado Global Hydrovacs shareholders have received a total shareholder return of 87% over the last year. That's better than the annualised return of 38% 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. It's always interesting to track share price performance over the longer term. But to understand Tornado Global Hydrovacs better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Tornado Global Hydrovacs .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com