It might seem bad, but the worst that can happen when you buy a stock (without leverage) is that its share price goes to zero. But when you pick a company that is really flourishing, you can make more than 100%. To wit, the Enerpac Tool Group Corp. (NYSE:EPAC) share price has flown 115% in the last three years. How nice for those who held the stock! It's also good to see the share price up 21% over the last quarter. But this move may well have been assisted by the reasonably buoyant market (up 11% in 90 days).

Now it's worth having a look at the company's fundamentals too, because that will help us determine if the long term shareholder return has matched the performance of the underlying business.

View our latest analysis for Enerpac Tool Group

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During three years of share price growth, Enerpac Tool Group achieved compound earnings per share growth of 31% per year. We don't think it is entirely coincidental that the EPS growth is reasonably close to the 29% average annual increase in the share price. This observation indicates that the market's attitude to the business hasn't changed all that much. Quite to the contrary, the share price has arguably reflected the EPS growth.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

It is of course excellent to see how Enerpac Tool Group has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling Enerpac Tool Group stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's nice to see that Enerpac Tool Group shareholders have received a total shareholder return of 67% over the last year. Of course, that includes the dividend. That's better than the annualised return of 14% 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. Before deciding if you like the current share price, check how Enerpac Tool Group scores on these 3 valuation metrics.

Of course Enerpac Tool Group may not be the best stock to buy. So you may wish to see this free collection of growth stocks.

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.