Can You Imagine How Elated Mastech Digital's (NYSEMKT:MHH) Shareholders Feel About Its 359% Share Price Gain?

We think all investors should try to buy and hold high quality multi-year winners. And we've seen some truly amazing gains over the years. For example, the Mastech Digital, Inc. (NYSEMKT:MHH) share price is up a whopping 359% in the last half decade, a handsome return for long term holders. And this is just one example of the epic gains achieved by some long term investors. The last week saw the share price soften some 3.5%.

View our latest analysis for Mastech Digital

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 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, Mastech Digital achieved compound earnings per share (EPS) growth of 28% per year. This EPS growth is slower than the share price growth of 36% 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.

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. Having said that, most people consider earnings and revenue growth trends to be a more meaningful guide to the business. It might be well worthwhile taking a look at our free report on Mastech Digital's earnings, revenue and cash flow.

A Different Perspective

It's good to see that Mastech Digital has rewarded shareholders with a total shareholder return of 52% in the last twelve months. That gain is better than the annual TSR over five years, which is 36%. 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 Mastech Digital better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Mastech Digital .

Mastech Digital is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.

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

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This article by Simply Wall St is general in nature. 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.
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