Here's Why Kemira Oyj (HEL:KEMIRA) Has Caught The Eye Of Investors

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 currently lacks a track record of revenue and profit. 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.

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

View our latest analysis for Kemira Oyj

How Quickly Is Kemira Oyj Increasing Earnings Per Share?

If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS) outcomes. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. Recognition must be given to the that Kemira Oyj has grown EPS by 40% per year, over the last three years. While that sort of growth rate isn't sustainable for long, it certainly catches the eye of prospective investors.

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. Kemira Oyj shareholders can take confidence from the fact that EBIT margins are up from 6.8% to 13%, and revenue is growing. That's great to see, on both counts.

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.

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

Are Kemira Oyj Insiders Aligned With All Shareholders?

It's said that there's no smoke without fire. For investors, insider buying is often the smoke that indicates which stocks could set the market alight. Because often, the purchase of stock is a sign that the buyer views it as undervalued. However, small purchases are not always indicative of conviction, and insiders don't always get it right.

The good news for Kemira Oyj is that one insider has illustrated their belief in the company's future with a huge purchase of shares in the last 12 months. Indeed, Vice Chairman of the Board Annika Paasikivi has accumulated shares over the last year, paying a total of €25m at an average price of about €16.20. It doesn't get much better than that, in terms of large investments from insiders.

Along with the insider buying, another encouraging sign for Kemira Oyj is that insiders, as a group, have a considerable shareholding. Holding €55m worth of stock in the company is no laughing matter and insiders will be committed in delivering the best outcomes for shareholders. This would indicate that the goals of shareholders and management are one and the same.

Is Kemira Oyj Worth Keeping An Eye On?

Kemira Oyj's earnings per share have been soaring, with growth rates sky high. The icing on the cake is that insiders own a large chunk of the company and one has even been buying more shares. This quick rundown suggests that the business may be of good quality, and also at an inflection point, so maybe Kemira Oyj deserves timely attention. Before you take the next step you should know about the 1 warning sign for Kemira Oyj that we have uncovered.

Keen growth investors love to see insider buying. Thankfully, Kemira Oyj isn't the only one. You can see a a curated list of Finnish companies which have exhibited consistent growth accompanied by recent insider buying.

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.