The 12% return this week takes Technical Olympic's (ATH:OLYMP) shareholders five-year gains to 83%

Stock pickers are generally looking for stocks that will outperform the broader market. Buying under-rated businesses is one path to excess returns. For example, long term Technical Olympic S.A. (ATH:OLYMP) shareholders have enjoyed a 83% share price rise over the last half decade, well in excess of the market return of around 69% (not including dividends). On the other hand, the more recent gains haven't been so impressive, with shareholders gaining just 5.4%.

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

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To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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 half decade, Technical Olympic became profitable. That would generally be considered a positive, so we'd hope to see the share price to rise.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

Dive deeper into Technical Olympic's key metrics by checking this interactive graph of Technical Olympic's earnings, revenue and cash flow.

A Different Perspective

Technical Olympic shareholders are up 5.4% for the year. Unfortunately this falls short of the market return. If we look back over five years, the returns are even better, coming in at 13% per year for five years. Maybe the share price is just taking a breather while the business executes on its growth strategy. Before deciding if you like the current share price, check how Technical Olympic scores on these 3 valuation metrics.

Of course Technical Olympic may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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