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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 completely lacks a track record of revenue and profit. But as Warren Buffett has mused, 'If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.' When they buy such story stocks, investors are all too often the patsy.
If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in Eolus Vind (STO:EOLU B). While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. In comparison, loss making companies act like a sponge for capital - but unlike such a sponge they do not always produce something when squeezed.
View our latest analysis for Eolus Vind
How Fast Is Eolus Vind Growing Its Earnings Per Share?
In business, though not in life, profits are a key measure of success; and share prices tend to reflect earnings per share (EPS). So like the hint of a smile on a face that I love, growing EPS generally makes me look twice. It is therefore awe-striking that Eolus Vind's EPS went from kr2.08 to kr8.33 in just one year. When you see earnings grow that quickly, it often means good things ahead for the company.
I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. Eolus Vind maintained stable EBIT margins over the last year, all while growing revenue 373% to kr2.2b. That's a real positive.
The chart below shows how the company's bottom and top lines have progressed over time. Click on the chart to see the exact numbers.
Since Eolus Vind is no giant, with a market capitalization of kr2.0b, so you should definitely check its cash and debt before getting too excited about its prospects.
Are Eolus Vind Insiders Aligned With All Shareholders?
Like the kids in the streets standing up for their beliefs, insider share purchases give me reason to believe in a brighter future. Because oftentimes, the purchase of stock is a sign that the buyer views it as undervalued. However, small purchases are not always indicative of conviction, and insiders don't always get it right.
One positive for Eolus Vind, is that company insiders paid kr160k for shares in the last year. This might not be a huge sum, but it's well worth noting anyway, given the complete lack of selling.
On top of the insider buying, it's good to see that Eolus Vind insiders have a valuable investment in the business. To be specific, they have kr239m worth of shares. That's a lot of money, and no small incentive to work hard. Those holdings account for over 12% of the company; visible skin in the game.