Vysarn's (ASX:VYS) investors will be pleased with their splendid 202% return over the last three years

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 if you buy shares in a really great company, you can more than double your money. For example, the Vysarn Limited (ASX:VYS) share price has soared 202% in the last three years. How nice for those who held the stock! On top of that, the share price is up 63% in about a quarter. The company reported its financial results recently; you can catch up on the latest numbers by reading our company report.

So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.

View our latest analysis for Vysarn

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.

Over the last three years, Vysarn failed to grow earnings per share, which fell 19% (annualized).

This means it's unlikely the market is judging the company based on earnings growth. Given this situation, it makes sense to look at other metrics too.

It could be that the revenue growth of 47% per year is viewed as evidence that Vysarn is growing. If the company is being managed for the long term good, today's shareholders might be right to hold on.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

earnings-and-revenue-growth

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 Vysarn's earnings, revenue and cash flow.

A Different Perspective

Pleasingly, Vysarn's total shareholder return last year was 138%. That gain actually surpasses the 45% TSR it generated (per year) over three years. Given the track record of solid returns over varying time frames, it might be worth putting Vysarn on your watchlist. It's always interesting to track share price performance over the longer term. But to understand Vysarn better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Vysarn .

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.

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.