Is Now The Time To Put MPC Container Ships (OB:MPCC) On Your Watchlist?

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 as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like MPC Container Ships (OB:MPCC). 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 MPC Container Ships

How Fast Is MPC Container Ships Growing Its Earnings Per Share?

In the last three years MPC Container Ships' earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. Thus, it makes sense to focus on more recent growth rates, instead. MPC Container Ships' EPS skyrocketed from US$0.69 to US$0.99, in just one year; a result that's bound to bring a smile to shareholders. That's a impressive gain of 43%.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. The good news is that MPC Container Ships is growing revenues, and EBIT margins improved by 12.2 percentage points to 58%, over the last year. Both of which are great metrics to check off for potential growth.

The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.

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. 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.

The good news is that MPC Container Ships insiders spent a whopping US$11m on stock in just one year, without so much as a single sale. 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.

On top of the insider buying, it's good to see that MPC Container Ships insiders have a valuable investment in the business. Indeed, they have a considerable amount of wealth invested in it, currently valued at US$1.5b. Coming in at 17% of the business, that holding gives insiders a lot of influence, and plenty of reason to generate value for shareholders. Very encouraging.

While insiders are apparently happy to hold and accumulate shares, that is just part of the big picture. 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$700k.

MPC Container Ships' CEO only received compensation totalling US$549k in the year to December 2022. You could consider this pay as somewhat symbolic, which suggests the CEO does not need a lot of compensation to stay motivated. CEO compensation is hardly the most important aspect of a company to consider, but when it's reasonable, that gives a little more confidence that leadership are looking out for shareholder interests. 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?

If you believe that share price follows earnings per share you should definitely be delving further into MPC Container Ships' strong EPS growth. Not only that, but we can see that insiders both own a lot of, and are buying more shares in the company. Astute investors will want to keep this stock on watch. Before you take the next step you should know about the 2 warning signs for MPC Container Ships (1 can't be ignored!) that we have uncovered.

Keen growth investors love to see insider buying. Thankfully, MPC Container Ships isn't the only one. You can see a a free list of them here.

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.