Does Jyske Bank (CPH:JYSK) Deserve A Spot On Your Watchlist?

Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.

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 Jyske Bank (CPH:JYSK). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Jyske Bank with the means to add long-term value to shareholders.

Check out our latest analysis for Jyske Bank

How Fast Is Jyske Bank Growing Its Earnings Per Share?

Jyske Bank 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. Thus, it makes sense to focus on more recent growth rates, instead. To the delight of shareholders, Jyske Bank's EPS soared from kr.55.35 to kr.89.35, over the last year. That's a fantastic gain of 61%.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. Our analysis has highlighted that Jyske Bank's revenue from operations did not account for all of their revenue in the previous 12 months, so our analysis of its margins might not accurately reflect the underlying business. EBIT margins for Jyske Bank remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 45% to kr.15b. That's progress.

The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.

In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of Jyske Bank's forecast profits?

Are Jyske Bank Insiders Aligned With All Shareholders?

Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.

Any way you look at it Jyske Bank shareholders can gain quiet confidence from the fact that insiders shelled out kr.2.3m to buy stock, over the last year. This, combined with the lack of sales from insiders, should be a great signal for shareholders in what's to come. It is also worth noting that it was MD & Member of Executive Board Peter Schleidt who made the biggest single purchase, worth kr.113k, paying kr.489 per share.

On top of the insider buying, it's good to see that Jyske Bank insiders have a valuable investment in the business. Indeed, they hold kr.84m worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. While their ownership only accounts for 0.2%, this is still a considerable amount at stake to encourage the business to maintain a strategy that will deliver value to shareholders.

Should You Add Jyske Bank To Your Watchlist?

If you believe that share price follows earnings per share you should definitely be delving further into Jyske Bank's strong EPS growth. On top of that, insiders own a significant stake in the company and have been buying more shares. These things considered, this is one stock worth watching. Before you take the next step you should know about the 1 warning sign for Jyske Bank that we have uncovered.

There are plenty of other companies that have insiders buying up shares. So if you like the sound of Jyske Bank, you'll probably love this curated collection of companies in DK that have witnessed growth alongside insider buying in the last three months.

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.