The simplest way to invest in stocks is to buy exchange traded funds. But you can significantly boost your returns by picking above-average stocks. To wit, the Nicholas Financial, Inc. (NASDAQ:NICK) share price is 53% higher than it was a year ago, much better than the market return of around 30% (not including dividends) in the same period. That's a solid performance by our standards! The longer term returns have not been as good, with the stock price only 2.9% higher than it was three years ago.

Let's take a look at the underlying fundamentals over the longer term, and see if they've been consistent with shareholders returns.

Check out our latest analysis for Nicholas Financial

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. 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 Nicholas Financial grew its earnings per share (EPS) by 103%. This EPS growth is significantly higher than the 53% increase in the share price. So it seems like the market has cooled on Nicholas Financial, despite the growth. Interesting. This cautious sentiment is reflected in its (fairly low) P/E ratio of 10.71.

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

We like that insiders have been buying shares in the last twelve months. Even so, future earnings will be far more important to whether current shareholders make money. It might be well worthwhile taking a look at our free report on Nicholas Financial's earnings, revenue and cash flow.

A Different Perspective

We're pleased to report that Nicholas Financial shareholders have received a total shareholder return of 53% over one year. Since the one-year TSR is better than the five-year TSR (the latter coming in at 4% per year), it would seem that the stock's performance has improved in recent times. Given the share price momentum remains strong, it might be worth taking a closer look at the stock, lest you miss an opportunity. 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. To that end, you should learn about the 3 warning signs we've spotted with Nicholas Financial (including 2 which are concerning) .

Nicholas Financial is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.