The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.
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 Edel SE KGaA (ETR:EDL). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Edel SE KGaA with the means to add long-term value to shareholders.
Check out our latest analysis for Edel SE KGaA
Edel SE KGaA's Improving Profits
Edel SE KGaA 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. Thus, it makes sense to focus on more recent growth rates, instead. In impressive fashion, Edel SE KGaA's EPS grew from €0.31 to €0.54, over the previous 12 months. It's not often a company can achieve year-on-year growth of 76%.
It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. While we note Edel SE KGaA achieved similar EBIT margins to last year, revenue grew by a solid 10% to €277m. That's encouraging news for the company!
You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.
Edel SE KGaA isn't a huge company, given its market capitalisation of €106m. That makes it extra important to check on its balance sheet strength.
Are Edel SE KGaA Insiders Aligned With All Shareholders?
Theory would suggest that it's an encouraging sign to see high insider ownership of a company, since it ties company performance directly to the financial success of its management. So we're pleased to report that Edel SE KGaA insiders own a meaningful share of the business. To be exact, company insiders hold 64% of the company, so their decisions have a significant impact on their investments. Intuition will tell you this is a good sign because it suggests they will be incentivised to build value for shareholders over the long term. With that sort of holding, insiders have about €68m riding on the stock, at current prices. So there's plenty there to keep them focused!