Société Fermière du Casino Municipal de Cannes (EPA:FCMC) surges 28% this week, taking five-year gains to 73%

Stock pickers are generally looking for stocks that will outperform the broader market. Buying under-rated businesses is one path to excess returns. To wit, the Société Fermière du Casino Municipal de Cannes share price has climbed 65% in five years, easily topping the market return of 34% (ignoring dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 28% in the last year.

The past week has proven to be lucrative for Société Fermière du Casino Municipal de Cannes investors, so let's see if fundamentals drove the company's five-year performance.

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There is no denying that markets are sometimes efficient, but prices do not always reflect 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, Société Fermière du Casino Municipal de Cannes moved from a loss to profitability. That would generally be considered a positive, so we'd hope to see the share price to rise. Since the company was unprofitable five years ago, but not three years ago, it's worth taking a look at the returns in the last three years, too. We can see that the Société Fermière du Casino Municipal de Cannes share price is up 46% in the last three years. During the same period, EPS grew by 92% each year. This EPS growth is higher than the 13% average annual increase in the share price over the same three years. So you might conclude the market is a little more cautious about the stock, these days.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

Dive deeper into Société Fermière du Casino Municipal de Cannes' key metrics by checking this interactive graph of Société Fermière du Casino Municipal de Cannes's earnings, revenue and cash flow.

What About The Total Shareholder Return (TSR)?

We've already covered Société Fermière du Casino Municipal de Cannes' share price action, but we should also mention its total shareholder return (TSR). 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. Dividends have been really beneficial for Société Fermière du Casino Municipal de Cannes shareholders, and that cash payout contributed to why its TSR of 73%, over the last 5 years, is better than the share price return.

A Different Perspective

We're pleased to report that Société Fermière du Casino Municipal de Cannes shareholders have received a total shareholder return of 28% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 12% per year), it would seem that the stock's performance has improved in recent times. 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 1 warning sign for Société Fermière du Casino Municipal de Cannes that you should be aware of.

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 French 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.