Is Now The Time To Put Grodno Spólka Akcyjna (WSE:GRN) On Your Watchlist?

It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

In contrast to all that, many investors prefer to focus on companies like Grodno Spólka Akcyjna (WSE:GRN), which has not only revenues, but also profits. Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Grodno Spólka Akcyjna with the means to add long-term value to shareholders.

View our latest analysis for Grodno Spólka Akcyjna

Grodno Spólka Akcyjna's Improving Profits

Grodno Spólka Akcyjna 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. Thus, it makes sense to focus on more recent growth rates, instead. Impressively, Grodno Spólka Akcyjna's EPS catapulted from zł0.92 to zł2.25, over the last year. It's not often a company can achieve year-on-year growth of 146%. The best case scenario? That the business has hit a true 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. EBIT margins for Grodno Spólka Akcyjna remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 54% to zł1.1b. That's a real positive.

In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.

Since Grodno Spólka Akcyjna is no giant, with a market capitalisation of zł231m, you should definitely check its cash and debt before getting too excited about its prospects.

Are Grodno Spólka Akcyjna Insiders Aligned With All Shareholders?

Many consider high insider ownership to be a strong sign of alignment between the leaders of a company and the ordinary shareholders. So as you can imagine, the fact that Grodno Spólka Akcyjna insiders own a significant number of shares certainly is appealing. In fact, they own 73% of the company, so they will share in the same delights and challenges experienced by the ordinary shareholders. Intuition will tell you this is a good sign because it suggests they will be incentivised to build value for shareholders over the long term. With that sort of holding, insiders have about zł169m riding on the stock, at current prices. So there's plenty there to keep them focused!

Is Grodno Spólka Akcyjna Worth Keeping An Eye On?

Grodno Spólka Akcyjna's earnings per share growth have been climbing higher at an appreciable rate. This level of EPS growth does wonders for attracting investment, and the large insider investment in the company is just the cherry on top. The hope is, of course, that the strong growth marks a fundamental improvement in the business economics. Based on the sum of its parts, we definitely think its worth watching Grodno Spólka Akcyjna very closely. What about risks? Every company has them, and we've spotted 2 warning signs for Grodno Spólka Akcyjna you should know about.

The beauty of investing is that you can invest in almost any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies 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.