Here's Why I Think Blancco Technology Group (LON:BLTG) Might Deserve Your Attention Today

By
Simply Wall St
Published
November 09, 2021
AIM:BLTG
Source: Shutterstock

Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story stocks' without revenue, let alone profit. 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.

If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in Blancco Technology Group (LON:BLTG). While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. In comparison, loss making companies act like a sponge for capital - but unlike such a sponge they do not always produce something when squeezed.

View our latest analysis for Blancco Technology Group

Blancco Technology Group's Improving Profits

In business, though not in life, profits are a key measure of success; and share prices tend to reflect earnings per share (EPS). So like a ray of sunshine through a gap in the clouds, improving EPS is considered a good sign. You can imagine, then, that it almost knocked my socks off when I realized that Blancco Technology Group grew its EPS from UK£0.00037 to UK£0.019, in one short year. When you see earnings grow that quickly, it often means good things ahead for the company.

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. The good news is that Blancco Technology Group is growing revenues, and EBIT margins improved by 3.6 percentage points to 2.6%, over the last year. Ticking those two boxes is a good sign of growth, in my book.

You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.

earnings-and-revenue-history
AIM:BLTG Earnings and Revenue History November 10th 2021

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

Are Blancco Technology Group Insiders Aligned With All Shareholders?

Like standing at the lookout, surveying the horizon at sunrise, insider buying, for some investors, sparks joy. Because oftentimes, 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.

We haven't seen any insiders selling Blancco Technology Group shares, in the last year. So it's definitely nice that Independent Non-Executive Director Thomas Skelton bought UK£21k worth of shares at an average price of around UK£2.78.

Does Blancco Technology Group Deserve A Spot On Your Watchlist?

Blancco Technology Group's earnings per share growth have been levitating higher, like a mountain goat scaling the Alps. If you're like me, you'll find it hard to ignore that sort of explosive EPS growth. And indeed, it could be a sign that the business is at an inflection point. For me, this situation certainly piques my interest. It is worth noting though that we have found 2 warning signs for Blancco Technology Group (1 doesn't sit too well with us!) that you need to take into consideration.

There are plenty of other companies that have insiders buying up shares. So if you like the sound of Blancco Technology Group, you'll probably love this free list of growing companies that insiders are buying.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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