Unfortunately, investing is risky - companies can and do go bankrupt. But when you pick a company that is really flourishing, you can make more than 100%. Take, for example IPD Group Limited (ASX:IPG). Its share price is already up an impressive 169% in the last twelve months. On top of that, the share price is up 39% in about a quarter. We'll need to follow IPD Group for a while to get a better sense of its share price trend, since it hasn't been listed for particularly long.

So let's investigate and see if the longer term performance of the company has been in line with the underlying business' progress.

See our latest analysis for IPD Group

To quote Buffett, 'Ships will sail around the world but the Flat Earth Society will flourish. There will continue to be wide discrepancies between price and value in the marketplace...' 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 the last year IPD Group grew its earnings per share (EPS) by 39%. The share price gain of 169% certainly outpaced the EPS growth. This indicates that the market is now more optimistic about the stock.

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

We know that IPD Group has improved its bottom line lately, but is it going to grow revenue? If you're interested, you could check this free report showing consensus revenue forecasts.

What About Dividends?

It is important to consider the total shareholder return, as well as the share price return, for any given stock. The TSR incorporates the value of any spin-offs or discounted capital raisings, along with any dividends, based on the assumption that the dividends are reinvested. It's fair to say that the TSR gives a more complete picture for stocks that pay a dividend. In the case of IPD Group, it has a TSR of 174% for the last 1 year. That exceeds its share price return that we previously mentioned. And there's no prize for guessing that the dividend payments largely explain the divergence!

A Different Perspective

It's nice to see that IPD Group shareholders have gained 174% over the last year, including dividends. A substantial portion of that gain has come in the last three months, with the stock up 39% in that time. Demand for the stock from multiple parties is pushing the price higher; it could be that word is getting out about its virtues as a business. Before deciding if you like the current share price, check how IPD Group scores on these 3 valuation metrics.