Lubawa's (WSE:LBW) five-year earnings growth trails the 54% YoY shareholder returns

We think all investors should try to buy and hold high quality multi-year winners. And highest quality companies can see their share prices grow by huge amounts. For example, the Lubawa S.A. (WSE:LBW) share price is up a whopping 755% in the last half decade, a handsome return for long term holders. If that doesn't get you thinking about long term investing, we don't know what will. Also pleasing for shareholders was the 32% gain in the last three months. But this could be related to the strong market, which is up 15% in the last three months. We love happy stories like this one. The company should be really proud of that performance!

Since the stock has added zł85m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

See our latest analysis for Lubawa

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 five years of share price growth, Lubawa achieved compound earnings per share (EPS) growth of 32% per year. This EPS growth is slower than the share price growth of 54% per year, over the same period. So it's fair to assume the market has a higher opinion of the business than it did five years ago. That's not necessarily surprising considering the five-year track record of earnings growth.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

It might be well worthwhile taking a look at our free report on Lubawa's earnings, revenue and cash flow.

A Different Perspective

It's nice to see that Lubawa shareholders have received a total shareholder return of 53% over the last year. However, the TSR over five years, coming in at 54% per year, is even more impressive. Is Lubawa cheap compared to other companies? These 3 valuation measures might help you decide.

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 Polish 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.