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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. 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.
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 MiMedx Group (NASDAQ:MDXG). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide MiMedx Group with the means to add long-term value to shareholders.
See our latest analysis for MiMedx Group
How Fast Is MiMedx Group Growing Its Earnings Per Share?
In business, profits are a key measure of success; and share prices tend to reflect earnings per share (EPS) performance. Which is why EPS growth is looked upon so favourably. It's an outstanding feat for MiMedx Group to have grown EPS from US$0.17 to US$0.54 in just one year. While it's difficult to sustain growth at that level, it bodes well for the company's outlook for the future.
Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. The good news is that MiMedx Group is growing revenues, and EBIT margins improved by 7.9 percentage points to 19%, over the last year. That's great to see, on both counts.
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.
Fortunately, we've got access to analyst forecasts of MiMedx Group's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.
Are MiMedx Group Insiders Aligned With All Shareholders?
It should give investors a sense of security owning shares in a company if insiders also own shares, creating a close alignment their interests. So it is good to see that MiMedx Group insiders have a significant amount of capital invested in the stock. As a matter of fact, their holding is valued at US$16m. That shows significant buy-in, and may indicate conviction in the business strategy. Despite being just 1.3% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.