Passive investing in index funds can generate returns that roughly match the overall market. But if you pick the right individual stocks, you could make more than that. For example, the Focus Financial Partners Inc. (NASDAQ:FOCS) share price is up 42% in the last 1 year, clearly besting the market return of around 13% (not including dividends). So that should have shareholders smiling. It is also impressive that the stock is up 36% over three years, adding to the sense that it is a real winner.

So let's assess the underlying fundamentals over the last 1 year and see if they've moved in lock-step with shareholder returns.

View our latest analysis for Focus Financial Partners

To paraphrase Benjamin Graham: Over the short term the market is a voting machine, but over the long term it's a weighing machine. 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.

During the last year Focus Financial Partners grew its earnings per share (EPS) by 46%. We note that the earnings per share growth isn't far from the share price growth (of 42%). So this implies that investor expectations of the company have remained pretty steady. It looks like the share price is responding to the EPS.

You can see below how EPS has changed over time (discover the exact values by clicking on the image).

We know that Focus Financial Partners has improved its bottom line over the last three years, but what does the future have in store? This free interactive report on Focus Financial Partners' balance sheet strength is a great place to start, if you want to investigate the stock further.

A Different Perspective

We're pleased to report that Focus Financial Partners rewarded shareholders with a total shareholder return of 42% over the last year. So this year's TSR was actually better than the three-year TSR (annualized) of 11%. The improving returns to shareholders suggests the stock is becoming more popular with time. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. Case in point: We've spotted 2 warning signs for Focus Financial Partners you should be aware of, and 1 of them is a bit concerning.

If you would prefer to check out another company -- one with potentially superior financials -- then do not miss this free list of companies that have proven they can grow earnings.