While some are satisfied with an index fund, active investors aim to find truly magnificent investments on the stock market. When you find (and hold) a big winner, you can markedly improve your finances. For example, the Razor Energy Corp. (CVE:RZE) share price is up a whopping 419% in the last 1 year, a handsome return in a single year. It's also up 42% in about a month. And shareholders have also done well over the long term, with an increase of 63% in the last three years.

Since the stock has added CA$8.3m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

Check out our latest analysis for Razor Energy

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 flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price.

During the last year Razor Energy grew its earnings per share, moving from a loss to a profit.

We think the growth looks very prospective, so we're not surprised the market liked it too. Inflection points like this can be a great time to take a closer look at a company.

The image below shows how EPS has tracked over time (if you click on the image you can see greater detail).

It might be well worthwhile taking a look at our free report on Razor Energy's earnings, revenue and cash flow.

We've already covered Razor Energy's share price action, but we should also mention its total shareholder return (TSR). The TSR is a return calculation that accounts for the value of cash dividends (assuming that any dividend received was reinvested) and the calculated value of any discounted capital raisings and spin-offs. Razor Energy's TSR of 478% for the 1 year exceeded its share price return, because it has paid dividends.

It's nice to see that Razor Energy shareholders have received a total shareholder return of 478% over the last year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 18% per year), it would seem that the stock's performance has improved in recent times. 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 Razor Energy better, we need to consider many other factors. For example, we've discovered 6 warning signs for Razor Energy (2 are potentially serious!) that you should be aware of before investing here.

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 CA 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.

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