Greencore Group's (LON:GNC) 129% return outpaced the company's earnings growth over the same one-year period

Unless you borrow money to invest, the potential losses are limited. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the Greencore Group plc (LON:GNC) share price has soared 129% in the last 1 year. Most would be very happy with that, especially in just one year! On top of that, the share price is up 19% in about a quarter. Looking back further, the stock price is 66% higher than it was three years ago.

The past week has proven to be lucrative for Greencore Group investors, so let's see if fundamentals drove the company's one-year performance.

Check out our latest analysis for Greencore Group

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 Greencore Group grew its earnings per share (EPS) by 110%. This EPS growth is reasonably close to the 129% increase in the share price. This makes us think the market hasn't really changed its sentiment around the company, in the last year. We don't think its coincidental that the share price is growing at a similar rate to the earnings per share.

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

We know that Greencore Group has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling Greencore Group stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's nice to see that Greencore Group shareholders have received a total shareholder return of 129% over the last year. Notably the five-year annualised TSR loss of 3% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. 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. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Greencore Group you should know about.

We will like Greencore Group better if we see some big insider buys. While we wait, check out this free list of undervalued stocks (mostly small caps) with considerable, recent, insider buying.

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