Investors in Organización Soriana S. A. B. de C. V (BMV:SORIANAB) have seen notable returns of 68% over the past five years

Stock pickers are generally looking for stocks that will outperform the broader market. And in our experience, buying the right stocks can give your wealth a significant boost. For example, long term Organización Soriana, S. A. B. de C. V. (BMV:SORIANAB) shareholders have enjoyed a 61% share price rise over the last half decade, well in excess of the market return of around 49% (not including dividends).

So let's assess the underlying fundamentals over the last 5 years and see if they've moved in lock-step with shareholder returns.

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There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During five years of share price growth, Organización Soriana S. A. B. de C. V achieved compound earnings per share (EPS) growth of 3.6% per year. This EPS growth is lower than the 10% average annual increase in the share price. So it's fair to assume the market has a higher opinion of the business than it did five years ago. And that's hardly shocking given the track record of growth.

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

We know that Organización Soriana S. A. B. de C. V has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Organización Soriana S. A. B. de C. V will grow revenue in the future.

What About The Total Shareholder Return (TSR)?

Investors should note that there's a difference between Organización Soriana S. A. B. de C. V's total shareholder return (TSR) and its share price change, which we've covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Dividends have been really beneficial for Organización Soriana S. A. B. de C. V shareholders, and that cash payout contributed to why its TSR of 68%, over the last 5 years, is better than the share price return.

A Different Perspective

Investors in Organización Soriana S. A. B. de C. V had a tough year, with a total loss of 13%, against a market gain of about 22%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. On the bright side, long term shareholders have made money, with a gain of 11% per year over half a decade. If the fundamental data continues to indicate long term sustainable growth, the current sell-off could be an opportunity worth considering. 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. For example, we've discovered 1 warning sign for Organización Soriana S. A. B. de C. V that you should be aware of before investing here.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

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