If EPS Growth Is Important To You, Warimpex Finanz- und Beteiligungs (VIE:WXF) Presents An Opportunity

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. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Warimpex Finanz- und Beteiligungs (VIE:WXF). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Warimpex Finanz- und Beteiligungs with the means to add long-term value to shareholders.

Check out our latest analysis for Warimpex Finanz- und Beteiligungs

How Fast Is Warimpex Finanz- und Beteiligungs Growing Its Earnings Per Share?

Even when EPS earnings per share (EPS) growth is unexceptional, company value can be created if this rate is sustained each year. So EPS growth can certainly encourage an investor to take note of a stock. Warimpex Finanz- und Beteiligungs boosted its trailing twelve month EPS from €0.49 to €0.57, in the last year. This amounts to a 17% gain; a figure that shareholders will be pleased to see.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. On the one hand, Warimpex Finanz- und Beteiligungs' EBIT margins fell over the last year, but on the other hand, revenue grew. So if EBIT margins can stabilize, this top-line growth should pay off for shareholders.

In the chart below, you can see how the company has grown earnings and revenue, over time. To see the actual numbers, click on the chart.

Since Warimpex Finanz- und Beteiligungs is no giant, with a market capitalisation of €43m, you should definitely check its cash and debt before getting too excited about its prospects.

Are Warimpex Finanz- und Beteiligungs Insiders Aligned With All Shareholders?

It's pleasing to see company leaders with putting their money on the line, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. Shareholders will be pleased by the fact that insiders own Warimpex Finanz- und Beteiligungs shares worth a considerable sum. As a matter of fact, their holding is valued at €13m. That shows significant buy-in, and may indicate conviction in the business strategy. As a percentage, this totals to 30% of the shares on issue for the business, an appreciable amount considering the market cap.

Should You Add Warimpex Finanz- und Beteiligungs To Your Watchlist?

As previously touched on, Warimpex Finanz- und Beteiligungs is a growing business, which is encouraging. To add an extra spark to the fire, significant insider ownership in the company is another highlight. These two factors are a huge highlight for the company which should be a strong contender your watchlists. You still need to take note of risks, for example - Warimpex Finanz- und Beteiligungs has 5 warning signs (and 3 which shouldn't be ignored) we think you should know about.

There's always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that do have those features. You can access a free list of them here.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.