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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.
So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like YOC (ETR:YOC). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide YOC with the means to add long-term value to shareholders.
Check out our latest analysis for YOC
YOC's Improving Profits
YOC 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. Outstandingly, YOC's EPS shot from €0.47 to €1.14, over the last year. It's not often a company can achieve year-on-year growth of 144%. Shareholders will be hopeful that this is a sign of the company reaching an inflection point.
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. YOC shareholders can take confidence from the fact that EBIT margins are up from 5.8% to 11%, and revenue is growing. That's great to see, on both counts.
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.
Fortunately, we've got access to analyst forecasts of YOC's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.
Are YOC Insiders Aligned With All Shareholders?
It's a necessity that company leaders act in the best interest of shareholders and so insider investment always comes as a reassurance to the market. YOC followers will find comfort in knowing that insiders have a significant amount of capital that aligns their best interests with the wider shareholder group. As a matter of fact, their holding is valued at €13m. This considerable investment should help drive long-term value in the business. That amounts to 22% of the company, demonstrating a degree of high-level alignment with shareholders.