Stock Analysis

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

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WSE:TME
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For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it completely lacks a track record of revenue and 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.

If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in Termoexpert Spólka Akcyjna (WSE:TME). While profit is not necessarily a social good, it's easy to admire a business that can consistently produce it. 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.

See our latest analysis for Termoexpert Spólka Akcyjna

How Fast Is Termoexpert Spólka Akcyjna Growing Its Earnings Per Share?

In the last three years Termoexpert Spólka Akcyjna's earnings per share took off like a rocket; fast, and from a low base. So the actual rate of growth doesn't tell us much. Thus, it makes sense to focus on more recent growth rates, instead. Like a wedge-tailed eagle on the wind, Termoexpert Spólka Akcyjna's EPS soared from zł0.24 to zł0.34, in just one year. That's a commendable gain of 40%.

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 Termoexpert Spólka Akcyjna is growing revenues, and EBIT margins improved by 4.0 percentage points to 7.8%, over the last year. Ticking those two boxes is a good sign of growth, in my book.

You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.

earnings-and-revenue-history
WSE:TME Earnings and Revenue History September 8th 2021

Termoexpert Spólka Akcyjna isn't a huge company, given its market capitalization of zł7.9m. That makes it extra important to check on its balance sheet strength.

Are Termoexpert 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 we're pleased to report that Termoexpert Spólka Akcyjna insiders own a meaningful share of the business. In fact, they own 87% of the company, so they will share in the same delights and challenges experienced by the ordinary shareholders. This makes me think they will be incentivised to plan for the long term - something I like to see. Valued at only zł7.9m Termoexpert Spólka Akcyjna is really small for a listed company. So despite a large proportional holding, insiders only have zł6.9m worth of stock. That might not be a huge sum but it should be enough to keep insiders motivated!

Does Termoexpert Spólka Akcyjna Deserve A Spot On Your Watchlist?

For growth investors like me, Termoexpert Spólka Akcyjna's raw rate of earnings growth is a beacon in the night. Further, the high level of insider ownership impresses me, and suggests that I'm not the only one who appreciates the EPS growth. Fast growth and confident insiders should be enough to warrant further research. So the answer is that I do think this is a good stock to follow along with. However, before you get too excited we've discovered 6 warning signs for Termoexpert Spólka Akcyjna (2 are concerning!) that you should be aware of.

Although Termoexpert Spólka Akcyjna certainly looks good to me, I would like it more if insiders were buying up shares. If you like to see insider buying, too, then this free list of growing companies that insiders are buying, could be exactly what you're looking for.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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