While United States Steel Corporation (NYSE:X) shareholders are probably generally happy, the stock hasn't had particularly good run recently, with the share price falling 21% in the last quarter. But over three years, the returns would have left most investors smiling In the last three years the share price is up, 84%: better than the market.

Although United States Steel has shed US$427m from its market cap this week, let's take a look at its longer term fundamental trends and see if they've driven returns.

See our latest analysis for United States Steel

While the efficient markets hypothesis continues to be taught by some, it has been proven that markets are over-reactive dynamic systems, and investors are not always rational. 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 three years of share price growth, United States Steel moved from a loss to profitability. That would generally be considered a positive, so we'd expect the share price to be up.

The graphic below depicts how EPS has changed over time (unveil the exact values by clicking on the image).

It is of course excellent to see how United States Steel has grown profits over the years, but the future is more important for shareholders. If you are thinking of buying or selling United States Steel stock, you should check out this FREE detailed report on its balance sheet.

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. So for companies that pay a generous dividend, the TSR is often a lot higher than the share price return. We note that for United States Steel the TSR over the last 3 years was 87%, which is better than the share price return mentioned above. And there's no prize for guessing that the dividend payments largely explain the divergence!

Although it hurts that United States Steel returned a loss of 4.4% in the last twelve months, the broader market was actually worse, returning a loss of 11%. Of course, the long term returns are far more important and the good news is that over five years, the stock has returned 3% for each year. It could be that the business is just facing some short term problems, but shareholders should keep a close eye on the fundamentals. It's always interesting to track share price performance over the longer term. But to understand United States Steel better, we need to consider many other factors. Even so, be aware that United States Steel is showing 3 warning signs in our investment analysis , and 1 of those is concerning...

For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.

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

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