Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.
In contrast to all that, I prefer to spend time on companies like Schlatter Industries (VTX:STRN), which has not only revenues, but also profits. Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. Loss-making companies are always racing against time to reach financial sustainability, but time is often a friend of the profitable company, especially if it is growing.
How Fast Is Schlatter Industries Growing Its Earnings Per Share?
In the last three years Schlatter Industries’s earnings per share took off like a rocket; fast, and from a low base. So the actual rate of growth doesn’t tell us much. Thus, it makes sense to focus on more recent growth rates, instead. Like a falcon taking flight, Schlatter Industries’s EPS soared from CHF2.60 to CHF3.37, over the last year. That’s a commendable gain of 29%.
I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company’s growth. While we note Schlatter Industries’s EBIT margins were flat over the last year, revenue grew by a solid 10% to CHF111m. That’s progress.
The chart below shows how the company’s bottom and top lines have progressed over time. For finer detail, click on the image.
Schlatter Industries isn’t a huge company, given its market capitalization of CHF44m. That makes it extra important to check on its balance sheet strength.
Are Schlatter Industries Insiders Aligned With All Shareholders?
Is Schlatter Industries Worth Keeping An Eye On?
You can’t deny that Schlatter Industries has grown its earnings per share at a very impressive rate. That’s attractive. While we’ve looked at the quality of the earnings, we haven’t yet done any work to value the stock. So if you like to buy cheap, you may want to check if Schlatter Industries is trading on a high P/E or a low P/E, relative to its industry.
Although Schlatter Industries certainly looks good to me, I would like it more if insiders were buying up shares. If you like to see insider buying, too, then this free list of growing companies that insiders are buying, could be exactly what you’re looking for.Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction
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If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.