Investors in Matrix Composites & Engineering (ASX:MCE) have seen impressive returns of 110% over the past three years

The most you can lose on any stock (assuming you don't use leverage) is 100% of your money. But in contrast you can make much more than 100% if the company does well. For instance the Matrix Composites & Engineering Ltd (ASX:MCE) share price is 103% higher than it was three years ago. How nice for those who held the stock! And in the last month, the share price has gained 13%.

So let's assess the underlying fundamentals over the last 3 years and see if they've moved in lock-step with shareholder returns.

See our latest analysis for Matrix Composites & Engineering

In his essay The Superinvestors of Graham-and-Doddsville Warren Buffett described how share prices do not always rationally reflect the value of a business. 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.

Matrix Composites & Engineering became profitable within the last three years. Given the importance of this milestone, it's not overly surprising that the share price has increased strongly.

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

We know that Matrix Composites & Engineering 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 Matrix Composites & Engineering stock, you should check out this FREE detailed report on its balance sheet.

We'd be remiss not to mention the difference between Matrix Composites & Engineering's total shareholder return (TSR) and its share price return. The TSR attempts to capture the value of dividends (as if they were reinvested) as well as any spin-offs or discounted capital raisings offered to shareholders. Dividends have been really beneficial for Matrix Composites & Engineering shareholders, and that cash payout contributed to why its TSR of 110%, over the last 3 years, is better than the share price return.

We're pleased to report that Matrix Composites & Engineering shareholders have received a total shareholder return of 34% over one year. Notably the five-year annualised TSR loss of 1.1% per year compares very unfavourably with the recent share price performance. We generally put more weight on the long term performance over the short term, but the recent improvement could hint at a (positive) inflection point within the business. It's always interesting to track share price performance over the longer term. But to understand Matrix Composites & Engineering better, we need to consider many other factors. Take risks, for example - Matrix Composites & Engineering has 2 warning signs we think you should be aware of.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of companies we expect will grow earnings.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.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.