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Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.
If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Brave Bison Group (LON:BBSN). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.
Check out our latest analysis for Brave Bison Group
How Fast Is Brave Bison Group Growing Its Earnings Per Share?
Investors and investment funds chase profits, and that means share prices tend rise with positive earnings per share (EPS) outcomes. So for many budding investors, improving EPS is considered a good sign. It is awe-striking that Brave Bison Group's EPS went from UK£0.00071 to UK£0.0037 in just one year. Even though that growth rate may not be repeated, that looks like a breakout improvement.
Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. While revenue is looking a bit flat, the good news is EBIT margins improved by 6.5 percentage points to 7.0%, in the last twelve months. Which is a great look for the company.
In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.
Since Brave Bison Group is no giant, with a market capitalisation of UK£25m, you should definitely check its cash and debt before getting too excited about its prospects.
Are Brave Bison Group Insiders Aligned With All Shareholders?
Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. Because often, the purchase of stock is a sign that the buyer views it as undervalued. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.
Our analysis into Brave Bison Group has shown that insiders have sold UK£1.0m worth of shares over the last 12 months. This falls short of the share acquisition by company insider Michael Ashcroft, who has acquired UK£1.1m worth of shares, at an average price of UK£0.025. And that's a reason to be optimistic.