Do Kongsberg Gruppen's (OB:KOG) Earnings Warrant Your Attention?

It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. 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 Kongsberg Gruppen (OB:KOG). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Kongsberg Gruppen with the means to add long-term value to shareholders.

Check out our latest analysis for Kongsberg Gruppen

How Quickly Is Kongsberg Gruppen Increasing Earnings Per Share?

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. Kongsberg Gruppen's shareholders have have plenty to be happy about as their annual EPS growth for the last 3 years was 44%. That sort of growth rarely ever lasts long, but it is well worth paying attention to when it happens.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. Kongsberg Gruppen maintained stable EBIT margins over the last year, all while growing revenue 25% to kr38b. 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 we live in the present moment, there's little doubt that the future matters most in the investment decision process. So why not check this interactive chart depicting future EPS estimates, for Kongsberg Gruppen?

Are Kongsberg Gruppen 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.

The first bit of good news is that no Kongsberg Gruppen insiders reported share sales in the last twelve months. Even better, though, is that the company insider, Gyrid Ingerø, bought a whopping kr3.4m worth of shares, paying about kr382 per share, on average. Big buys like that may signal an opportunity; actions speak louder than words.

Should You Add Kongsberg Gruppen To Your Watchlist?

Kongsberg Gruppen's earnings per share growth have been climbing higher at an appreciable rate. Growth-minded people will be intrigued by the incredible movement in EPS growth. And may very well signal a significant inflection point for the business. If this these factors intrigue you, then an addition of Kongsberg Gruppen to your watchlist won't go amiss. What about risks? Every company has them, and we've spotted 1 warning sign for Kongsberg Gruppen you should know about.

Keen growth investors love to see insider buying. Thankfully, Kongsberg Gruppen isn't the only one. You can see a a curated list of Norwegian companies which have exhibited consistent growth accompanied by recent insider buying.

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.