With EPS Growth And More, Lerøy Seafood Group (OB:LSG) Makes An Interesting Case

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. 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. 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 Lerøy Seafood Group (OB:LSG). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.

Check out our latest analysis for Lerøy Seafood Group

How Quickly Is Lerøy Seafood Group Increasing Earnings Per Share?

If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS) outcomes. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. We can see that in the last three years Lerøy Seafood Group grew its EPS by 4.7% per year. This may not be setting the world alight, but it does show that EPS is on the upwards trend.

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. The music to the ears of Lerøy Seafood Group shareholders is that EBIT margins have grown from 8.4% to 16% in the last 12 months and revenues are on an upwards trend as well. That's great to see, on both counts.

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.

Fortunately, we've got access to analyst forecasts of Lerøy Seafood Group's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are Lerøy Seafood Group Insiders Aligned With All Shareholders?

It's said that there's no smoke without fire. For investors, insider buying is often the smoke that indicates which stocks could set the market alight. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, small purchases are not always indicative of conviction, and insiders don't always get it right.

We haven't seen any insiders selling Lerøy Seafood Group shares, in the last year. With that in mind, it's heartening that Henning Beltestad, the Group CEO of the company, paid kr495k for shares at around kr70.70 each. Decent buying like this could be a sign for shareholders here; management sees the company as undervalued.

Does Lerøy Seafood Group Deserve A Spot On Your Watchlist?

As previously touched on, Lerøy Seafood Group is a growing business, which is encouraging. Not every business can grow its EPS, but Lerøy Seafood Group certainly can. The icing on the cake is that an insider bought shares during the year; a point of interest for people who will want to keep a watchful eye on this stock. It's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Lerøy Seafood Group , and understanding this should be part of your investment process.

The good news is that Lerøy Seafood Group 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.