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Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.
So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like StealthGas (NASDAQ:GASS). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide StealthGas with the means to add long-term value to shareholders.
Check out our latest analysis for StealthGas
How Fast Is StealthGas Growing Its Earnings Per Share?
StealthGas 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. As a result, we'll zoom in on growth over the last year, instead. StealthGas' EPS skyrocketed from US$1.14 to US$1.44, in just one year; a result that's bound to bring a smile to shareholders. That's a fantastic gain of 26%.
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. Unfortunately, StealthGas' revenue dropped 5.1% last year, but the silver lining is that EBIT margins improved from 24% to 33%. That's not a good look.
In the chart below, you can see how the company has grown earnings and revenue, over time. Click on the chart to see the exact numbers.
Since StealthGas is no giant, with a market capitalisation of US$239m, you should definitely check its cash and debt before getting too excited about its prospects.
Are StealthGas 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 StealthGas insiders have a significant amount of capital invested in the stock. Given insiders own a significant chunk of shares, currently valued at US$71m, they have plenty of motivation to push the business to succeed. At 30% of the company, the co-investment by insiders fosters confidence that management will make long-term focussed decisions.