Investing in Ollie's Bargain Outlet Holdings (NASDAQ:OLLI) five years ago would have delivered you a 53% gain

When you buy and hold a stock for the long term, you definitely want it to provide a positive return. But more than that, you probably want to see it rise more than the market average. But Ollie's Bargain Outlet Holdings, Inc. (NASDAQ:OLLI) has fallen short of that second goal, with a share price rise of 53% over five years, which is below the market return. On a brighter note, more newer shareholders are probably rather content with the 33% share price gain over twelve months.

With that in mind, it's worth seeing if the company's underlying fundamentals have been the driver of long term performance, or if there are some discrepancies.

See our latest analysis for Ollie's Bargain Outlet Holdings

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 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, Ollie's Bargain Outlet Holdings achieved compound earnings per share (EPS) growth of 8.6% per year. This EPS growth is remarkably close to the 9% average annual increase in the share price. This indicates that investor sentiment towards the company has not changed a great deal. Indeed, it would appear the share price is reacting to the EPS.

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

We know that Ollie's Bargain Outlet Holdings has improved its bottom line lately, but is it going to grow revenue? Check if analysts think Ollie's Bargain Outlet Holdings will grow revenue in the future.

A Different Perspective

Ollie's Bargain Outlet Holdings shareholders are up 33% for the year. But that was short of the market average. On the bright side, that's still a gain, and it's actually better than the average return of 9% over half a decade It is possible that returns will improve along with the business fundamentals. If you would like to research Ollie's Bargain Outlet Holdings in more detail then you might want to take a look at whether insiders have been buying or selling shares in the company.

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 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.