Capacit'e Infraprojects' (NSE:CAPACITE) 71% return outpaced the company's earnings growth over the same one-year period

The simplest way to invest in stocks is to buy exchange traded funds. But one can do better than that by picking better than average stocks (as part of a diversified portfolio). For example, the Capacit'e Infraprojects Limited (NSE:CAPACITE) share price is up 71% in the last 1 year, clearly besting the market return of around 43% (not including dividends). That's a solid performance by our standards! It is also impressive that the stock is up 60% over three years, adding to the sense that it is a real winner.

Since it's been a strong week for Capacit'e Infraprojects shareholders, let's have a look at trend of the longer term fundamentals.

View our latest analysis for Capacit'e Infraprojects

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. By comparing earnings per share (EPS) and share price changes over time, we can get a feel for how investor attitudes to a company have morphed over time.

During the last year Capacit'e Infraprojects grew its earnings per share (EPS) by 15%. The share price gain of 71% certainly outpaced the EPS growth. This indicates that the market is now more optimistic about the stock.

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

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. Dive deeper into the earnings by checking this interactive graph of Capacit'e Infraprojects' earnings, revenue and cash flow.

A Different Perspective

It's nice to see that Capacit'e Infraprojects shareholders have received a total shareholder return of 71% over the last year. That gain is better than the annual TSR over five years, which is 9%. Therefore it seems like sentiment around the company has been positive lately. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 1 warning sign we've spotted with Capacit'e Infraprojects .

Capacit'e Infraprojects is not the only stock that insiders are buying. For those who like to find lesser know companies this free list of growing companies with recent insider purchasing, could be just the ticket.

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