National Tyre & Wheel Limited (ASX:NTD) shareholders have seen the share price descend 15% over the month. On the bright side the share price is up over the last half decade. Unfortunately its return of 55% is below the market return of 58%.

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.

Check out our latest analysis for National Tyre & Wheel

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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, National Tyre & Wheel actually saw its EPS drop 14% per year.

Essentially, it doesn't seem likely that investors are focused on EPS. Since the change in EPS doesn't seem to correlate with the change in share price, it's worth taking a look at other metrics.

On the other hand, National Tyre & Wheel's revenue is growing nicely, at a compound rate of 33% over the last five years. In that case, the company may be sacrificing current earnings per share to drive growth.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

It's good to see that there was some significant insider buying in the last three months. That's a positive. That said, we think earnings and revenue growth trends are even more important factors to consider. So we recommend checking out this free report showing consensus forecasts

What About The Total Shareholder Return (TSR)?

Investors should note that there's a difference between National Tyre & Wheel's total shareholder return (TSR) and its share price change, which we've covered above. Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Dividends have been really beneficial for National Tyre & Wheel shareholders, and that cash payout contributed to why its TSR of 104%, over the last 5 years, is better than the share price return.

A Different Perspective

We're pleased to report that National Tyre & Wheel shareholders have received a total shareholder return of 13% over one year. However, that falls short of the 15% TSR per annum it has made for shareholders, each year, over five years. It's always interesting to track share price performance over the longer term. But to understand National Tyre & Wheel better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for National Tyre & Wheel (of which 1 is a bit unpleasant!) you should know about.

National Tyre & Wheel is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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