Generally speaking the aim of active stock picking is to find companies that provide returns that are superior to the market average. And in our experience, buying the right stocks can give your wealth a significant boost. For example, long term RBC Bearings Incorporated (NYSE:RBC) shareholders have enjoyed a 100% share price rise over the last half decade, well in excess of the market return of around 76% (not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 25% in the last year.

Since it's been a strong week for RBC Bearings shareholders, let's have a look at trend of the longer term fundamentals.

See our latest analysis for RBC Bearings

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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, RBC Bearings managed to grow its earnings per share at 7.7% a year. This EPS growth is lower than the 15% 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. This optimism is visible in its fairly high P/E ratio of 45.14.

You can see how EPS has changed over time in the image below (click on the chart to see the exact values).

We know that RBC Bearings has improved its bottom line lately, but is it going to grow revenue? Check if analysts think RBC Bearings will grow revenue in the future.

A Different Perspective

RBC Bearings provided a TSR of 25% over the last twelve months. But that was short of the market average. On the bright side, that's still a gain, and it's actually better than the average return of 15% over half a decade It is possible that returns will improve along with the business fundamentals. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. For example, we've discovered 1 warning sign for RBC Bearings that you should be aware of before investing here.

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 American 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.