Here's Why MPC Container Ships (OB:MPCC) Has Caught The Eye Of Investors

Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. 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.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in MPC Container Ships (OB:MPCC). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide MPC Container Ships with the means to add long-term value to shareholders.

View our latest analysis for MPC Container Ships

MPC Container Ships' Improving Profits

Over the last three years, MPC Container Ships has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. As a result, we'll zoom in on growth over the last year, instead. Impressively, MPC Container Ships' EPS catapulted from US$0.46 to US$0.98, over the last year. It's a rarity to see 114% year-on-year growth like that. Shareholders will be hopeful that this is a sign of the company reaching an inflection point.

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. The good news is that MPC Container Ships is growing revenues, and EBIT margins improved by 17.9 percentage points to 56%, 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.

In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of MPC Container Ships' forecast profits?

Are MPC Container Ships 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.

The real kicker here is that MPC Container Ships insiders spent a staggering US$14m on acquiring shares in just one year, without single share being sold in the meantime. Knowing this, MPC Container Ships will have have all eyes on them in anticipation for the what could happen in the near future. Zooming in, we can see that the biggest insider purchase was by Director Axel Schroeder for kr9.4m worth of shares, at about kr21.42 per share.

The good news, alongside the insider buying, for MPC Container Ships bulls is that insiders (collectively) have a meaningful investment in the stock. Notably, they have an enviable stake in the company, worth US$1.6b. Coming in at 22% of the business, that holding gives insiders a lot of influence, and plenty of reason to generate value for shareholders. Looking very optimistic for investors.

Shareholders have more to smile about than just insiders adding more shares to their already sizeable holdings. That's because on our analysis the CEO, Constantin Baack, is paid less than the median for similar sized companies. For companies with market capitalisations between US$400m and US$1.6b, like MPC Container Ships, the median CEO pay is around US$623k.

The MPC Container Ships CEO received total compensation of only US$549k in the year to December 2022. This could be considered a token amount, and indicates that the company does not need to use payment to motivate the CEO - that is often a good sign. 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.

Does MPC Container Ships Deserve A Spot On Your Watchlist?

MPC Container Ships' earnings per share have been soaring, with growth rates sky high. What's more, insiders own a significant stake in the company and have been buying more shares. These factors seem to indicate the company's potential and that it has reached an inflection point. We'd suggest MPC Container Ships belongs near the top of your watchlist. Even so, be aware that MPC Container Ships is showing 2 warning signs in our investment analysis , and 1 of those is a bit concerning...

The good news is that MPC Container Ships 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.