If You Like EPS Growth Then Check Out mwb fairtrade Wertpapierhandelsbank (ETR:MWB) Before It's Too Late

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 completely lacks a track record of revenue and profit. But as Warren Buffett has mused, 'If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.' When they buy such story stocks, investors are all too often the patsy.

In the age of tech-stock blue-sky investing, my choice may seem old fashioned; I still prefer profitable companies like mwb fairtrade Wertpapierhandelsbank (ETR:MWB). Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.

See our latest analysis for mwb fairtrade Wertpapierhandelsbank

How Quickly Is mwb fairtrade Wertpapierhandelsbank Increasing Earnings Per Share?

The market is a voting machine in the short term, but a weighing machine in the long term, so share price follows earnings per share (EPS) eventually. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. Impressively, mwb fairtrade Wertpapierhandelsbank has grown EPS by 36% per year, compound, in the last three years. As a general rule, we'd say that if a company can keep up that sort of growth, shareholders will be smiling.

I like to see top-line growth as an indication that growth is sustainable, and I look for a high earnings before interest and taxation (EBIT) margin to point to a competitive moat (though some companies with low margins also have moats). While we note mwb fairtrade Wertpapierhandelsbank's EBIT margins were flat over the last year, revenue grew by a solid 133% to €35m. That's a real positive.

In the chart below, you can see how the company has grown earnings, and revenue, over time. To see the actual numbers, click on the chart.

mwb fairtrade Wertpapierhandelsbank isn't a huge company, given its market capitalization of €69m. That makes it extra important to check on its balance sheet strength.

Are mwb fairtrade Wertpapierhandelsbank Insiders Aligned With All Shareholders?

It makes me feel more secure owning shares in a company if insiders also own shares, thusly more closely aligning our interests. As a result, I'm encouraged by the fact that insiders own mwb fairtrade Wertpapierhandelsbank shares worth a considerable sum. Indeed, they hold €13m worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. Those holdings account for over 19% of the company; visible skin in the game.

It's good to see that insiders are invested in the company, but are remuneration levels reasonable? A brief analysis of the CEO compensation suggests they are. For companies with market capitalizations under €163m, like mwb fairtrade Wertpapierhandelsbank, the median CEO pay is around €396k.

mwb fairtrade Wertpapierhandelsbank offered total compensation worth €204k to its CEO in the year to . That comes in below the average for similar sized companies, and seems pretty reasonable to me. While the level of CEO compensation isn't a huge factor in my view of the company, modest remuneration is a positive, because it suggests that the board keeps shareholder interests in mind. It can also be a sign of a culture of integrity, in a broader sense.

Should You Add mwb fairtrade Wertpapierhandelsbank To Your Watchlist?

You can't deny that mwb fairtrade Wertpapierhandelsbank has grown its earnings per share at a very impressive rate. That's attractive. If you need more convincing beyond that EPS growth rate, don't forget about the reasonable remuneration and the high insider ownership. This may only be a fast rundown, but the takeaway for me is that mwb fairtrade Wertpapierhandelsbank is worth keeping an eye on. However, before you get too excited we've discovered 3 warning signs for mwb fairtrade Wertpapierhandelsbank that you should be aware of.

Although mwb fairtrade Wertpapierhandelsbank 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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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. 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.
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