Here's Why Constantinou Bros Hotels (CSE:CBH) Has Caught The Eye Of Investors

It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. 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. 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.

In contrast to all that, many investors prefer to focus on companies like Constantinou Bros Hotels (CSE:CBH), which has not only revenues, but also profits. Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.

View our latest analysis for Constantinou Bros Hotels

How Fast Is Constantinou Bros Hotels Growing Its Earnings Per Share?

Over the last three years, Constantinou Bros Hotels has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. As a result, we'll zoom in on growth over the last year, instead. Constantinou Bros Hotels' EPS has risen over the last 12 months, growing from €0.041 to €0.05. That's a 23% gain; respectable growth in the broader scheme of things.

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. Constantinou Bros Hotels maintained stable EBIT margins over the last year, all while growing revenue 7.9% to €58m. That's encouraging news for the company!

You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.

Since Constantinou Bros Hotels is no giant, with a market capitalisation of €16m, you should definitely check its cash and debt before getting too excited about its prospects.

Are Constantinou Bros Hotels Insiders Aligned With All Shareholders?

Seeing insiders owning a large portion of the shares on issue is often a good sign. Their incentives will be aligned with the investors and there's less of a probability in a sudden sell-off that would impact the share price. So those who are interested in Constantinou Bros Hotels will be delighted to know that insiders have shown their belief, holding a large proportion of the company's shares. In fact, they own 87% of the company, so they will share in the same delights and challenges experienced by the ordinary shareholders. This makes it apparent they will be incentivised to plan for the long term - a positive for shareholders with a sit and hold strategy. Of course, Constantinou Bros Hotels is a very small company, with a market cap of only €16m. So despite a large proportional holding, insiders only have €14m worth of stock. This isn't an overly large holding but it should still keep the insiders motivated to deliver the best outcomes for shareholders.

Does Constantinou Bros Hotels Deserve A Spot On Your Watchlist?

As previously touched on, Constantinou Bros Hotels 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 - Constantinou Bros Hotels has 3 warning signs (and 2 which make us uncomfortable) we think you should know about.

While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in CY with promising growth potential and insider confidence.

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.