Here's Why Unfold.vc ASI (WSE:UNF) 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 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 Unfold.vc ASI (WSE:UNF). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Unfold.vc ASI with the means to add long-term value to shareholders.

Check out our latest analysis for Unfold.vc ASI

How Fast Is Unfold.vc ASI Growing Its Earnings Per Share?

In the last three years Unfold.vc ASI's 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. Outstandingly, Unfold.vc ASI's EPS shot from zł0.53 to zł0.89, over the last year. It's not often a company can achieve year-on-year growth of 67%. 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. Not all of Unfold.vc ASI's revenue this year is revenue from operations, so keep in mind the revenue and margin numbers used in this article might not be the best representation of the underlying business. The good news is that Unfold.vc ASI is growing revenues, and EBIT margins improved by 2.7 percentage points to 93%, over the last year. That's great to see, on both counts.

You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.

Since Unfold.vc ASI is no giant, with a market capitalisation of zł61m, you should definitely check its cash and debt before getting too excited about its prospects.

Are Unfold.vc ASI Insiders Aligned With All Shareholders?

Theory would suggest that it's an encouraging sign to see high insider ownership of a company, since it ties company performance directly to the financial success of its management. So as you can imagine, the fact that Unfold.vc ASI insiders own a significant number of shares certainly is appealing. To be exact, company insiders hold 90% of the company, so their decisions have a significant impact on their investments. 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. Although, with Unfold.vc ASI being valued at zł61m, this is a small company we're talking about. So despite a large proportional holding, insiders only have zł55m worth of stock. That might not be a huge sum but it should be enough to keep insiders motivated!

Should You Add Unfold.vc ASI To Your Watchlist?

Unfold.vc ASI's earnings per share have been soaring, with growth rates sky high. That EPS growth certainly is attention grabbing, and the large insider ownership only serves to further stoke our interest. The hope is, of course, that the strong growth marks a fundamental improvement in the business economics. So based on this quick analysis, we do think it's worth considering Unfold.vc ASI for a spot on your watchlist. It's still necessary to consider the ever-present spectre of investment risk. We've identified 3 warning signs with Unfold.vc ASI (at least 1 which doesn't sit too well with us) , and understanding them should be part of your investment process.

There's always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that do have those features. You can access a free list of them here.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.