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Can You Imagine How Chuffed Vectrus's (NYSE:VEC) Shareholders Feel About Its 149% Share Price Gain?

Simply Wall St

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But if you buy shares in a really great company, you can more than double your money. For instance the Vectrus, Inc. (NYSE:VEC) share price is 149% higher than it was three years ago. Most would be happy with that. On top of that, the share price is up 27% in about a quarter. But this move may well have been assisted by the reasonably buoyant market (up 12% in 90 days).

Check out our latest analysis for Vectrus

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just 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.

Vectrus was able to grow its EPS at 8.4% per year over three years, sending the share price higher. In comparison, the 35% per year gain in the share price outpaces the EPS growth. So it's fair to assume the market has a higher opinion of the business than it did three years ago. It is quite common to see investors become enamoured with a business, after a few years of solid progress.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

NYSE:VEC Past and Future Earnings, January 20th 2020

Dive deeper into Vectrus's key metrics by checking this interactive graph of Vectrus's earnings, revenue and cash flow.

A Different Perspective

It's good to see that Vectrus has rewarded shareholders with a total shareholder return of 137% in the last twelve months. That gain is better than the annual TSR over five years, which is 15%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. It's always interesting to track share price performance over the longer term. But to understand Vectrus better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Vectrus you should know about.

If you are like me, then you will 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 US exchanges.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.