If EPS Growth Is Important To You, Grey Wolf Animal Health (CVE:WOLF) Presents An Opportunity

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. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. 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.

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 Grey Wolf Animal Health (CVE:WOLF). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Grey Wolf Animal Health with the means to add long-term value to shareholders.

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Grey Wolf Animal Health's Earnings Per Share Are 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. Grey Wolf Animal Health's shareholders have have plenty to be happy about as their annual EPS growth for the last 3 years was 44%. Growth that fast may well be fleeting, but it should be more than enough to pique the interest of the wary stock pickers.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. The music to the ears of Grey Wolf Animal Health shareholders is that EBIT margins have grown from 5.7% to 7.9% in the last 12 months and revenues are on an upwards trend as well. That's great to see, on both counts.

The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.

View our latest analysis for Grey Wolf Animal Health

Since Grey Wolf Animal Health is no giant, with a market capitalisation of CA$36m, you should definitely check its cash and debt before getting too excited about its prospects.

Are Grey Wolf Animal Health Insiders Aligned With All Shareholders?

Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. Because often, the purchase of stock is a sign that the buyer views it as undervalued. However, small purchases are not always indicative of conviction, and insiders don't always get it right.

In the last twelve months Grey Wolf Animal Health insiders spent CA$48k on stock; good news for shareholders. This might not be a huge sum, but it's well worth noting anyway, given the complete lack of selling. It is also worth noting that it was Chief Financial Officer Kevin Palmer who made the biggest single purchase, worth CA$22k, paying CA$1.05 per share.

Is Grey Wolf Animal Health Worth Keeping An Eye On?

Grey Wolf Animal Health's earnings have taken off in quite an impressive fashion. Growth investors should find it difficult to look past that strong EPS move. And indeed, it could be a sign that the business is at an inflection point. If that's the case, you may regret neglecting to put Grey Wolf Animal Health on your watchlist. We should say that we've discovered 2 warning signs for Grey Wolf Animal Health (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Keen growth investors love to see insider activity. Thankfully, Grey Wolf Animal Health isn't the only one. You can see a a curated list of Canadian companies which have exhibited consistent growth accompanied by high insider ownership.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.