Stock Analysis

Park & Bellheimer (FRA:PKB) Ticks All The Boxes When It Comes To Earnings Growth

Published
DB:PKB

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. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. 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 Park & Bellheimer (FRA:PKB). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Park & Bellheimer with the means to add long-term value to shareholders.

View our latest analysis for Park & Bellheimer

Park & Bellheimer's Improving Profits

Park & Bellheimer has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. As a result, we'll zoom in on growth over the last year, instead. Over the last year, Park & Bellheimer increased its EPS from €0.36 to €0.40. That's a fair increase of 9.1%.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. EBIT margins for Park & Bellheimer remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 5.8% to €25m. That's encouraging news for the company!

In the chart below, you can see how the company has grown earnings and revenue, over time. Click on the chart to see the exact numbers.

DB:PKB Earnings and Revenue History February 14th 2025

Park & Bellheimer isn't a huge company, given its market capitalisation of €12m. That makes it extra important to check on its balance sheet strength.

Are Park & Bellheimer Insiders Aligned With All Shareholders?

Theory would suggest that it's an encouraging sign to see high insider ownership of a company, since it ties company performance directly to the financial success of its management. So as you can imagine, the fact that Park & Bellheimer insiders own a significant number of shares certainly is appealing. Indeed, with a collective holding of 81%, company insiders are in control and have plenty of capital behind the venture. This should be seen as a good thing, as it means insiders have a personal interest in delivering the best outcomes for shareholders. Although, with Park & Bellheimer being valued at €12m, this is a small company we're talking about. So this large proportion of shares owned by insiders only amounts to €9.3m. That might not be a huge sum but it should be enough to keep insiders motivated!

Should You Add Park & Bellheimer To Your Watchlist?

One positive for Park & Bellheimer is that it is growing EPS. That's nice to see. If that's not enough on its own, there is also the rather notable levels of insider ownership. The combination definitely favoured by investors so consider keeping the company on a watchlist. Still, you should learn about the 2 warning signs we've spotted with Park & Bellheimer (including 1 which doesn't sit too well with us).

Although Park & Bellheimer certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with more skin in the game, then check out this handpicked selection of German companies that not only boast of strong growth but have strong insider backing.

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.