If EPS Growth Is Important To You, Istarska kreditna banka Umag d.d (ZGSE:IKBA) Presents An Opportunity

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

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 Istarska kreditna banka Umag d.d (ZGSE:IKBA). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

See our latest analysis for Istarska kreditna banka Umag d.d

How Fast Is Istarska kreditna banka Umag d.d Growing?

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. That makes EPS growth an attractive quality for any company. Over the last three years, Istarska kreditna banka Umag d.d has grown EPS by 16% per year. That's a pretty good rate, if the company can sustain it.

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. Not all of Istarska kreditna banka Umag d.d's revenue this year is revenue from operations, so keep in mind the revenue and margin numbers used in this article might not be the best representation of the underlying business. While we note Istarska kreditna banka Umag d.d achieved similar EBIT margins to last year, revenue grew by a solid 21% to €19m. That's progress.

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.

Istarska kreditna banka Umag d.d isn't a huge company, given its market capitalisation of €55m. That makes it extra important to check on its balance sheet strength.

Are Istarska kreditna banka Umag d.d 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. Shareholders will be pleased by the fact that insiders own Istarska kreditna banka Umag d.d shares worth a considerable sum. Indeed, they hold €13m worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. As a percentage, this totals to 25% of the shares on issue for the business, an appreciable amount considering the market cap.

Is Istarska kreditna banka Umag d.d Worth Keeping An Eye On?

One positive for Istarska kreditna banka Umag d.d is that it is growing EPS. That's nice to see. If that's not enough on its own, there is also the rather notable levels of insider ownership. The combination definitely favoured by investors so consider keeping the company on a watchlist. Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Istarska kreditna banka Umag d.d (1 can't be ignored) you should be aware of.

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.