RBC Bearings (NYSE:RBC) stock performs better than its underlying earnings growth over last five years

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But on a lighter note, a good company can see its share price rise well over 100%. One great example is RBC Bearings Incorporated (NYSE:RBC) which saw its share price drive 184% higher over five years. It's also up 12% in about a month. But this could be related to good market conditions -- stocks in its market are up 12% in the last month.

Since the stock has added US$624m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

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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...' 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.

Over half a decade, RBC Bearings managed to grow its earnings per share at 6.6% a year. This EPS growth is slower than the share price growth of 23% per year, over the same period. This suggests that market participants hold the company in higher regard, these days. And that's hardly shocking given the track record of growth. This optimism is visible in its fairly high P/E ratio of 49.67.

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

It is of course excellent to see how RBC Bearings has grown profits over the years, but the future is more important for shareholders. Take a more thorough look at RBC Bearings' financial health with this free report on its balance sheet.

A Different Perspective

It's nice to see that RBC Bearings shareholders have received a total shareholder return of 33% over the last year. That gain is better than the annual TSR over five years, which is 23%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand RBC Bearings better, we need to consider many other factors. Even so, be aware that RBC Bearings is showing 1 warning sign in our investment analysis , you should know about...

But note: RBC Bearings may not be the best stock to buy. So take a peek at this free list of interesting companies with past earnings growth (and further growth forecast).

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