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. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. 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 Belvoir Group (LON:BLV). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Belvoir Group with the means to add long-term value to shareholders.
See our latest analysis for Belvoir Group
How Fast Is Belvoir Group 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. Belvoir Group managed to grow EPS by 16% per year, over three years. That's a good rate of growth, if it can be sustained.
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. On the revenue front, Belvoir Group has done well over the past year, growing revenue by 21% to UK£31m but EBIT margin figures were less stellar, seeing a decline over the last 12 months. If EBIT margins are able to stay balanced and this revenue growth continues, then we should see brighter days ahead.
You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.
Since Belvoir Group is no giant, with a market capitalisation of UK£84m, you should definitely check its cash and debt before getting too excited about its prospects.
Are Belvoir 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. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. However, small purchases are not always indicative of conviction, and insiders don't always get it right.
The good news for Belvoir Group shareholders is that no insiders reported selling shares in the last year. So it's definitely nice that Independent Non-Executive Director Jonathan Di-Stefano bought UK£23k worth of shares at an average price of around UK£2.25. Decent buying like this could be a sign for shareholders here; management sees the company as undervalued.