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 Lancaster Colony Corporation (NASDAQ:LANC) shareholders have enjoyed a 60% share price rise over the last half decade, well in excess of the market return of around 35% (not including dividends).
There is no denying that markets are sometimes efficient, but prices do not always reflect 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, Lancaster Colony