With EPS Growth And More, Mitre Realty Empreendimentos e Participações (BVMF:MTRE3) Makes An Interesting Case

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. 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 Mitre Realty Empreendimentos e Participações (BVMF:MTRE3). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

View our latest analysis for Mitre Realty Empreendimentos e Participações

How Fast Is Mitre Realty Empreendimentos e Participações Growing?

The market is a voting machine in the short term, but a weighing machine in the long term, so you'd expect share price to follow earnings per share (EPS) outcomes eventually. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Shareholders will be happy to know that Mitre Realty Empreendimentos e Participações' EPS has grown 20% each year, compound, over three years. If the company can sustain that sort of growth, we'd expect shareholders to come away satisfied.

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. While we note Mitre Realty Empreendimentos e Participações achieved similar EBIT margins to last year, revenue grew by a solid 22% to R$926m. That's a real positive.

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 Mitre Realty Empreendimentos e Participações' future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are Mitre Realty Empreendimentos e Participações 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. Shareholders will be pleased by the fact that insiders own Mitre Realty Empreendimentos e Participações shares worth a considerable sum. As a matter of fact, their holding is valued at R$127m. This considerable investment should help drive long-term value in the business. Those holdings account for over 26% of the company; visible skin in the game.

Is Mitre Realty Empreendimentos e Participações Worth Keeping An Eye On?

If you believe that share price follows earnings per share you should definitely be delving further into Mitre Realty Empreendimentos e Participações' strong EPS growth. With EPS growth rates like that, it's hardly surprising to see company higher-ups place confidence in the company through continuing to hold a significant investment. On the balance of its merits, solid EPS growth and company insiders who are aligned with the shareholders would indicate a business that is worthy of further research. It is worth noting though that we have found 5 warning signs for Mitre Realty Empreendimentos e Participações (3 shouldn't be ignored!) that you need to take into consideration.

Although Mitre Realty Empreendimentos e Participações certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with insider buying, then check out this handpicked selection of Brazilian companies that not only boast of strong growth but have also seen recent insider buying..

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.