If EPS Growth Is Important To You, Musti Group Oyj (HEL:MUSTI) Presents An Opportunity

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. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' 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 Musti Group Oyj (HEL:MUSTI). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Musti Group Oyj with the means to add long-term value to shareholders.

View our latest analysis for Musti Group Oyj

How Fast Is Musti Group Oyj Growing?

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. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. It certainly is nice to see that Musti Group Oyj has managed to grow EPS by 29% per year over three years. As a general rule, we'd say that if a company can keep up that sort of growth, shareholders will be beaming.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. EBIT margins for Musti Group Oyj remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 8.9% to €426m. That's a real positive.

You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.

While profitability drives the upside, prudent investors always check the balance sheet, too.

Are Musti Group Oyj 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. 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.

Any way you look at it Musti Group Oyj shareholders can gain quiet confidence from the fact that insiders shelled out €347k 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. Zooming in, we can see that the biggest insider purchase was by Chief Executive Officer David Ronnberg for €178k worth of shares, at about €15.32 per share.

On top of the insider buying, it's good to see that Musti Group Oyj insiders have a valuable investment in the business. Indeed, they hold €29m worth of its stock. That's a lot of money, and no small incentive to work hard. Even though that's only about 3.3% of the company, it's enough money to indicate alignment between the leaders of the business and ordinary shareholders.

Does Musti Group Oyj Deserve A Spot On Your Watchlist?

You can't deny that Musti Group Oyj has grown its earnings per share at a very impressive rate. That's attractive. Not only that, but we can see that insiders both own a lot of, and are buying more shares in the company. Astute investors will want to keep this stock on watch. It is worth noting though that we have found 1 warning sign for Musti Group Oyj that you need to take into consideration.

Keen growth investors love to see insider buying. Thankfully, Musti Group Oyj isn't the only one. You can see a a free list of them here.

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.