Does SpareBank 1 Østlandet (OB:SPOL) Deserve A Spot On Your Watchlist?

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. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

In contrast to all that, many investors prefer to focus on companies like SpareBank 1 Østlandet (OB:SPOL), which has not only revenues, but also profits. Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide SpareBank 1 Østlandet with the means to add long-term value to shareholders.

See our latest analysis for SpareBank 1 Østlandet

How Quickly Is SpareBank 1 Østlandet Increasing Earnings Per Share?

Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. SpareBank 1 Østlandet managed to grow EPS by 17% per year, over three years. That's a pretty good rate, if the company can sustain it.

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. Not all of SpareBank 1 Østlandet'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. SpareBank 1 Østlandet maintained stable EBIT margins over the last year, all while growing revenue 13% to kr4.9b. That's progress.

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.

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 SpareBank 1 Østlandet's future profits.

Are SpareBank 1 Østlandet 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, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.

One positive for SpareBank 1 Østlandet, is that company insiders spent kr202k acquiring shares in the last year. This might not be a huge sum, but it's well worth noting anyway, given the complete lack of selling.

It's commendable to see that insiders have been buying shares in SpareBank 1 Østlandet, but there is more evidence of shareholder friendly management. Namely, SpareBank 1 Østlandet has a very reasonable level of CEO pay. The median total compensation for CEOs of companies similar in size to SpareBank 1 Østlandet, with market caps between kr11b and kr34b, is around kr9.0m.

The SpareBank 1 Østlandet CEO received kr5.0m in compensation for the year ending December 2022. That seems pretty reasonable, especially given it's below the median for similar sized companies. CEO remuneration levels are not the most important metric for investors, but when the pay is modest, that does support enhanced alignment between the CEO and the ordinary shareholders. It can also be a sign of a culture of integrity, in a broader sense.

Should You Add SpareBank 1 Østlandet To Your Watchlist?

One important encouraging feature of SpareBank 1 Østlandet is that it is growing profits. And there's more to SpareBank 1 Østlandet, with the insider buying and modest CEO pay being a great look for those with an eye on the company. All things considered, SpareBank 1 Østlandet is certainly displaying its merits and is worthy of taking research to the next step. You still need to take note of risks, for example - SpareBank 1 Østlandet has 1 warning sign we think you should be aware of.

Keen growth investors love to see insider buying. Thankfully, SpareBank 1 Østlandet 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.