If EPS Growth Is Important To You, Kongsberg Gruppen (OB:KOG) 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. 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 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 Fast Is Kongsberg Gruppen Growing Its Earnings Per Share?

Kongsberg Gruppen has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. So it would be better to isolate the growth rate over the last year for our analysis. Kongsberg Gruppen's EPS skyrocketed from kr12.06 to kr15.76, in just one year; a result that's bound to bring a smile to shareholders. That's a impressive gain of 31%.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. Kongsberg Gruppen maintained stable EBIT margins over the last year, all while growing revenue 16% to kr32b. That's a real positive.

You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.

Of course the knack is to find stocks that have their best days in the future, not in the past. You could base your opinion on past performance, of course, but you may also want to check this interactive graph of professional analyst EPS forecasts 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. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.

It's good to see Kongsberg Gruppen insiders walking the walk, by spending kr3.7m on shares in just twelve months. This, combined with the lack of sales from insiders, should be a great signal for shareholders in what's to come. We also note that it was the company insider, Gyrid Ingerø, who made the biggest single acquisition, paying kr3.4m for shares at about kr382 each.

Is Kongsberg Gruppen Worth Keeping An Eye On?

If you believe that share price follows earnings per share you should definitely be delving further into Kongsberg Gruppen's strong EPS growth. The growth rate should be enticing enough to consider researching the company, and the insider buying is a great added bonus. So on this analysis, Kongsberg Gruppen is probably worth spending some time on. You still need to take note of risks, for example - Kongsberg Gruppen has 1 warning sign we think you should be aware of.

The good news is that Kongsberg Gruppen is not the only growth stock with insider buying. Here's a list of them... 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.