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Here's Why We Think VEEM (ASX:VEE) Might Deserve Your Attention Today

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It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. 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 VEEM (ASX:VEE). 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.

See our latest analysis for VEEM

VEEM's Earnings Per Share Are Growing

If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS) outcomes. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. We can see that in the last three years VEEM grew its EPS by 6.7% per year. This may not be setting the world alight, but it does show that EPS is on the upwards trend.

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. The good news is that VEEM is growing revenues, and EBIT margins improved by 4.8 percentage points to 12%, over the last year. That's great to see, on both counts.

In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.

earnings-and-revenue-history
ASX:VEE Earnings and Revenue History July 31st 2024

Since VEEM is no giant, with a market capitalisation of AU$246m, you should definitely check its cash and debt before getting too excited about its prospects.

Are VEEM 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. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. Of course, we can never be sure what insiders are thinking, we can only judge their actions.

We haven't seen any insiders selling VEEM shares, in the last year. With that in mind, it's heartening that Angus Murnaghan, the Independent Non-Executive Director of the company, paid AU$44k for shares at around AU$1.76 each. It seems that at least one insider is prepared to show the market there is potential within VEEM.