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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. 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 Burger Fuel Group (NZSE:BFG), which has not only revenues, but also profits. Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Burger Fuel Group with the means to add long-term value to shareholders.
Check out our latest analysis for Burger Fuel Group
Burger Fuel Group's Earnings Per Share Are Growing
Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Shareholders will be happy to know that Burger Fuel Group's EPS has grown 31% each year, compound, over three years. If growth like this continues on into the future, then shareholders will have plenty to smile about.
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. While we note Burger Fuel Group achieved similar EBIT margins to last year, revenue grew by a solid 5.1% to NZ$26m. That's progress.
In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.
Burger Fuel Group isn't a huge company, given its market capitalisation of NZ$12m. That makes it extra important to check on its balance sheet strength.
Are Burger Fuel Group Insiders Aligned With All Shareholders?
Investors are always searching for a vote of confidence in the companies they hold and insider buying is one of the key indicators for optimism on the market. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.
The good news for Burger Fuel Group shareholders is that no insiders reported selling shares in the last year. With that in mind, it's heartening that Christopher Mason, the company insider of the company, paid NZ$29k for shares at around NZ$0.30 each. It seems that at least one insider is prepared to show the market there is potential within Burger Fuel Group.