When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose your money. But on the bright side, if you buy shares in a high quality company at the right price, you can gain well over 100%. One great example is WESCO International, Inc. (NYSE:WCC) which saw its share price drive 167% higher over five years. And in the last week the share price has popped 9.0%. This could be related to the recent financial results, released less than a week ago -- you can catch up on the most recent data by reading our company report.

Since the stock has added US$546m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

See our latest analysis for WESCO International

While markets are a powerful pricing mechanism, share prices reflect investor sentiment, not just underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

Over half a decade, WESCO International managed to grow its earnings per share at 30% a year. The EPS growth is more impressive than the yearly share price gain of 22% over the same period. So one could conclude that the broader market has become more cautious towards the stock. This cautious sentiment is reflected in its (fairly low) P/E ratio of 9.08.

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 WESCO International has improved its bottom line over the last three years, but what does the future have in store? Take a more thorough look at WESCO International's financial health with this free report on its balance sheet.

A Different Perspective

It's nice to see that WESCO International shareholders have received a total shareholder return of 17% over the last year. That's including the dividend. However, that falls short of the 22% TSR per annum it has made for shareholders, each year, over five years. 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with WESCO International , and understanding them should be part of your investment process.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: insiders have been buying them).

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.