We Ran A Stock Scan For Earnings Growth And Qt Group Oyj (HEL:QTCOM) Passed With Ease

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

See our latest analysis for Qt Group Oyj

Qt Group Oyj's Improving Profits

In the last three years Qt Group Oyj's earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. As a result, we'll zoom in on growth over the last year, instead. Qt Group Oyj's EPS skyrocketed from €0.89 to €1.37, in just one year; a result that's bound to bring a smile to shareholders. That's a commendable gain of 54%.

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. EBIT margins for Qt Group Oyj remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 27% to €164m. That's a real positive.

In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.

You don't drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for Qt Group Oyj's future profits.

Are Qt Group Oyj Insiders Aligned With All Shareholders?

It should give investors a sense of security owning shares in a company if insiders also own shares, creating a close alignment their interests. Qt Group Oyj followers will find comfort in knowing that insiders have a significant amount of capital that aligns their best interests with the wider shareholder group. We note that their impressive stake in the company is worth €180m. Investors will appreciate management having this amount of skin in the game as it shows their commitment to the company's future.

Does Qt Group Oyj Deserve A Spot On Your Watchlist?

If you believe that share price follows earnings per share you should definitely be delving further into Qt Group Oyj's strong EPS growth. Further, the high level of insider ownership is impressive and suggests that the management appreciates the EPS growth and has faith in Qt Group Oyj's continuing strength. Fast growth and confident insiders should be enough to warrant further research, so it would seem that it's a good stock to follow. It is worth noting though that we have found 3 warning signs for Qt Group Oyj (1 is concerning!) that you need to take into consideration.

The beauty of investing is that you can invest in almost any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies with 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.