Here's Why We Think SAF-Holland (ETR:SFQ) Might Deserve Your Attention Today

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. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. 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.

Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like SAF-Holland (ETR:SFQ). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide SAF-Holland with the means to add long-term value to shareholders.

View our latest analysis for SAF-Holland

SAF-Holland's Improving Profits

Over the last three years, SAF-Holland 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. So it would be better to isolate the growth rate over the last year for our analysis. In impressive fashion, SAF-Holland's EPS grew from €0.85 to €1.49, over the previous 12 months. It's a rarity to see 74% year-on-year growth like that. Shareholders will be hopeful that this is a sign of the company reaching an inflection point.

It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. EBIT margins for SAF-Holland remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 26% to €1.7b. 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. Click on the chart to see the exact numbers.

Fortunately, we've got access to analyst forecasts of SAF-Holland's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are SAF-Holland Insiders Aligned With All Shareholders?

Does SAF-Holland Deserve A Spot On Your Watchlist?

SAF-Holland's earnings per share have been soaring, with growth rates sky high. Even so, be aware that SAF-Holland is showing 2 warning signs in our investment analysis , you should know about...

Although SAF-Holland certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see insider buying, 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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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.