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For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.
In contrast to all that, many investors prefer to focus on companies like GQG Partners (ASX:GQG), which has not only revenues, but also profits. While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.
Check out our latest analysis for GQG Partners
How Fast Is GQG Partners Growing Its Earnings Per Share?
GQG Partners has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. So it would be better to isolate the growth rate over the last year for our analysis. GQG Partners' EPS shot up from US$0.096 to US$0.15; a result that's bound to keep shareholders happy. That's a impressive gain of 53%.
One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. EBIT margins for GQG Partners remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 47% to US$760m. That's a real positive.
The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.
In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of GQG Partners' forecast profits?
Are GQG Partners Insiders Aligned With All Shareholders?
It's said that there's no smoke without fire. For investors, insider buying is often the smoke that indicates which stocks could set the market alight. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. Of course, we can never be sure what insiders are thinking, we can only judge their actions.
One shining light for GQG Partners is the serious outlay one insider has made to buy shares, in the last year. In one fell swoop, Founder Rajiv Jain, spent AU$503k, at a price of AU$2.28 per share. It doesn't get much better than that, in terms of large investments from insiders.