I Ran A Stock Scan For Earnings Growth And Klaveness Combination Carriers (OB:KCC) Passed With Ease

It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks with a good story, even if those businesses lose money. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.'

In contrast to all that, I prefer to spend time on companies like Klaveness Combination Carriers (OB:KCC), which has not only revenues, but also profits. Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. While a well funded company may sustain losses for years, unless its owners have an endless appetite for subsidizing the customer, it will need to generate a profit eventually, or else breathe its last breath.

Check out our latest analysis for Klaveness Combination Carriers

How Fast Is Klaveness Combination Carriers Growing?

If a company can keep growing earnings per share (EPS) long enough, its share price will eventually follow. That makes EPS growth an attractive quality for any company. Who among us would not applaud Klaveness Combination Carriers's stratospheric annual EPS growth of 56%, compound, over the last three years? Growth that fast may well be fleeting, but like a lotus blooming from a murky pond, it sparks joy for the wary stock pickers.

I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. The good news is that Klaveness Combination Carriers is growing revenues, and EBIT margins improved by 9.2 percentage points to 18%, over the last year. That's great to see, on both counts.

In the chart below, you can see how the company has grown earnings, and revenue, over time. Click on the chart to see the exact numbers.

Klaveness Combination Carriers isn't a huge company, given its market capitalization of kr1.8b. That makes it extra important to check on its balance sheet strength.

Are Klaveness Combination Carriers Insiders Aligned With All Shareholders?

Like the kids in the streets standing up for their beliefs, insider share purchases give me reason to believe in a brighter future. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. However, small purchases are not always indicative of conviction, and insiders don't always get it right.

One positive for Klaveness Combination Carriers, is that company insiders paid US$214k for 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.

Should You Add Klaveness Combination Carriers To Your Watchlist?

Klaveness Combination Carriers's earnings have taken off like any random crypto-currency did, back in 2017. If you're like me, you'll find it hard to ignore that sort of explosive EPS growth. And indeed, it could be a sign that the business is at an inflection point. For me, this situation certainly piques my interest. It's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Klaveness Combination Carriers (at least 1 which doesn't sit too well with us) , and understanding these should be part of your investment process.

The good news is that Klaveness Combination Carriers 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. 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.
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