Is Now The Time To Put S.C. Prebet Aiud (BVB:PREB) On Your Watchlist?

Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.

If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in S.C. Prebet Aiud (BVB:PREB). While profit is not necessarily a social good, it's easy to admire a business that can consistently produce it. Loss-making companies are always racing against time to reach financial sustainability, but time is often a friend of the profitable company, especially if it is growing.

View our latest analysis for S.C. Prebet Aiud

How Fast Is S.C. Prebet Aiud Growing Its Earnings Per Share?

Over the last three years, S.C. Prebet Aiud has grown earnings per share (EPS) like young bamboo after rain; fast, and from a low base. So I don't think the percent growth rate is particularly meaningful. Thus, it makes sense to focus on more recent growth rates, instead. Like the last firework on New Year's Eve accelerating into the sky, S.C. Prebet Aiud's EPS shot from RON0.076 to RON0.14, over the last year. You don't see 89% year-on-year growth like that, very often.

I like to see top-line growth as an indication that growth is sustainable, and I look for a high earnings before interest and taxation (EBIT) margin to point to a competitive moat (though some companies with low margins also have moats). This approach makes S.C. Prebet Aiud look pretty good, on balance; although revenue is flattish, EBIT margins improved from 15% to 24% in the last year. That's a real positive.

In the chart below, you can see how the company has grown earnings, and revenue, over time. To see the actual numbers, click on the chart.

S.C. Prebet Aiud isn't a huge company, given its market capitalization of RON73m. That makes it extra important to check on its balance sheet strength.

Are S.C. Prebet Aiud Insiders Aligned With All Shareholders?

Personally, I like to see high insider ownership of a company, since it suggests that it will be managed in the interests of shareholders. So we're pleased to report that S.C. Prebet Aiud insiders own a meaningful share of the business. Actually, with 35% of the company to their names, insiders are profoundly invested in the business. I'm always comforted by solid insider ownership like this, as it implies that those running the business are genuinely motivated to create shareholder value. Valued at only RON73m S.C. Prebet Aiud is really small for a listed company. So despite a large proportional holding, insiders only have RON26m worth of stock. That might not be a huge sum but it should be enough to keep insiders motivated!

Does S.C. Prebet Aiud Deserve A Spot On Your Watchlist?

S.C. Prebet Aiud's earnings have taken off like any random crypto-currency did, back in 2017. That EPS growth certainly has my attention, and the large insider ownership only serves to further stoke my interest. The hope is, of course, that the strong growth marks a fundamental improvement in the business economics. So to my mind S.C. Prebet Aiud is worth putting on your watchlist; after all, shareholders do well when the market underestimates fast growing companies. It's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with S.C. Prebet Aiud , and understanding this should be part of your investment process.

Although S.C. Prebet Aiud 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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