Stock pickers are generally looking for stocks that will outperform the broader market. And the truth is, you can make significant gains if you buy good quality businesses at the right price. For example, long term Chubb Arabia Cooperative Insurance Company (TADAWUL:8240) shareholders have enjoyed a 81% share price rise over the last half decade, well in excess of the market return of around 29% (not including dividends). However, more recent returns haven't been as impressive as that, with the stock returning just 48% in the last year.

Since the stock has added ر.س73m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

View our latest analysis for Chubb Arabia Cooperative Insurance

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 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).

During five years of share price growth, Chubb Arabia Cooperative Insurance actually saw its EPS drop 16% per year.

Essentially, it doesn't seem likely that investors are focused on EPS. Because earnings per share don't seem to match up with the share price, we'll take a look at other metrics instead.

In contrast revenue growth of 8.9% per year is probably viewed as evidence that Chubb Arabia Cooperative Insurance is growing, a real positive. It's quite possible that management are prioritizing revenue growth over EPS growth at the moment.

You can see how earnings and revenue have changed over time in the image below (click on the chart to see the exact values).

You can see how its balance sheet has strengthened (or weakened) over time in this free interactive graphic.

A Different Perspective

We're pleased to report that Chubb Arabia Cooperative Insurance shareholders have received a total shareholder return of 48% over one year. That's better than the annualised return of 13% over half a decade, implying that the company is doing better recently. Someone with an optimistic perspective could view the recent improvement in TSR as indicating that the business itself is getting better with time. It's always interesting to track share price performance over the longer term. But to understand Chubb Arabia Cooperative Insurance better, we need to consider many other factors. For instance, we've identified 1 warning sign for Chubb Arabia Cooperative Insurance that you should be aware of.

We will like Chubb Arabia Cooperative Insurance better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on Saudi exchanges.

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.