Evertop Wire Cable's (TWSE:1616) five-year earnings growth trails the incredible shareholder returns

We think all investors should try to buy and hold high quality multi-year winners. While not every stock performs well, when investors win, they can win big. Just think about the savvy investors who held Evertop Wire Cable Corporation (TWSE:1616) shares for the last five years, while they gained 464%. If that doesn't get you thinking about long term investing, we don't know what will. On top of that, the share price is up 95% in about a quarter.

Since the stock has added NT$910m 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 Evertop Wire Cable

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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During five years of share price growth, Evertop Wire Cable achieved compound earnings per share (EPS) growth of 85% per year. The EPS growth is more impressive than the yearly share price gain of 41% over the same period. Therefore, it seems the market has become relatively pessimistic about the company.

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

This free interactive report on Evertop Wire Cable's earnings, revenue and cash flow is a great place to start, if you want to investigate the stock further.

A Different Perspective

It's good to see that Evertop Wire Cable has rewarded shareholders with a total shareholder return of 157% in the last twelve months. That's better than the annualised return of 41% over half a decade, implying that the company is doing better recently. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. It's always interesting to track share price performance over the longer term. But to understand Evertop Wire Cable better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Evertop Wire Cable .

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

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