For many, the main point of investing in the stock market is to achieve spectacular returns. While the best companies are hard to find, but they can generate massive returns over long periods. For example, the Sterling Infrastructure, Inc. (NASDAQ:STRL) share price is up a whopping 919% in the last half decade, a handsome return for long term holders. If that doesn't get you thinking about long term investing, we don't know what will. On top of that, the share price is up 25% in about a quarter. It really delights us to see such great share price performance for investors.

While the stock has fallen 3.3% this week, it's worth focusing on the longer term and seeing if the stocks historical returns have been driven by the underlying fundamentals.

See our latest analysis for Sterling Infrastructure

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. 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, Sterling Infrastructure managed to grow its earnings per share at 42% a year. This EPS growth is lower than the 59% average annual increase in the share price. So it's fair to assume the market has a higher opinion of the business than it did five years ago. And that's hardly shocking given the track record of growth.

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

We know that Sterling Infrastructure has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling Sterling Infrastructure stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

It's good to see that Sterling Infrastructure has rewarded shareholders with a total shareholder return of 95% in the last twelve months. That's better than the annualised return of 59% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Sterling Infrastructure , and understanding them should be part of your investment process.