Here's Why We Think Tryg (CPH:TRYG) 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. 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. 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.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Tryg (CPH:TRYG). While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.

See our latest analysis for Tryg

How Quickly Is Tryg Increasing Earnings Per Share?

The market is a voting machine in the short term, but a weighing machine in the long term, so you'd expect share price to follow earnings per share (EPS) outcomes eventually. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. Tryg managed to grow EPS by 12% per year, over three years. That's a good rate of growth, if it can be sustained.

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. It's noted that, last year, Tryg's revenue from operations was lower than its revenue, so that could distort our analysis of its margins. The music to the ears of Tryg shareholders is that EBIT margins have grown from 14% to 17% in the last 12 months and revenues are on an upwards trend as well. Both of which are great metrics to check off for potential growth.

The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.

Of course the knack is to find stocks that have their best days in the future, not in the past. You could base your opinion on past performance, of course, but you may also want to check this interactive graph of professional analyst EPS forecasts for Tryg.

Are Tryg 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. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. Of course, we can never be sure what insiders are thinking, we can only judge their actions.

While Tryg insiders did net kr.1.2m selling stock over the last year, they invested kr.6.1m, a much higher figure. This overall confidence in the company at current the valuation signals their optimism. It is also worth noting that it was Group CEO & Member of Executive Board Johan Brammer who made the biggest single purchase, worth kr.5.7m, paying kr.146 per share.

It's reassuring that Tryg insiders are buying the stock, but that's not the only reason to think management are fair to shareholders. Namely, Tryg has a very reasonable level of CEO pay. For companies with market capitalisations over kr.55b, like Tryg, the median CEO pay is around kr.32m.

Tryg's CEO took home a total compensation package worth kr.23m in the year leading up to December 2024. That is actually below the median for CEO's of similarly sized companies. While the level of CEO compensation shouldn't be the biggest factor in how the company is viewed, modest remuneration is a positive, because it suggests that the board keeps shareholder interests in mind. It can also be a sign of good governance, more generally.

Should You Add Tryg To Your Watchlist?

As previously touched on, Tryg is a growing business, which is encouraging. And there's more to Tryg, with the insider buying and modest CEO pay being a great look for those with an eye on the company. All things considered, Tryg is certainly displaying its merits and is worthy of taking research to the next step. You should always think about risks though. Case in point, we've spotted 1 warning sign for Tryg you should be aware of.

Keen growth investors love to see insider activity. Thankfully, Tryg isn't the only one. You can see a a curated list of Danish companies which have exhibited consistent growth accompanied by high insider ownership.

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.