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. But as Warren Buffett has mused, ‘If you’ve been playing poker for half an hour and you still don’t know who the patsy is, you’re the patsy.’ When they buy such story stocks, investors are all too often the patsy.
If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in ROSBANK (MCX:ROSB). While that doesn’t make the shares worth buying at any price, you can’t deny that successful capitalism requires profit, eventually. 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.
ROSBANK’s Improving Profits
In the last three years ROSBANK’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. As a result, I’ll zoom in on growth over the last year, instead. It’s good to see that ROSBANK’s EPS have grown from RUруб6.70 to RUруб7.61 over twelve months. That’s a 14% gain; respectable growth in the broader scheme of things.
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. Not all of ROSBANK’s revenue this year is revenue from operations, so keep in mind the revenue and margin numbers I’ve used might not be the best representation of the underlying business. While we note ROSBANK’s EBIT margins were flat over the last year, revenue grew by a solid 5.0% to RUруб52b. That’s a real positive.
The chart below shows how the company’s bottom and top lines have progressed over time. Click on the chart to see the exact numbers.
While it’s always good to see growing profits, you should always remember that a weak balance sheet could come back to bite. So check ROSBANK’s balance sheet strength, before getting too excited.
Are ROSBANK Insiders Aligned With All Shareholders?
Is ROSBANK Worth Keeping An Eye On?
One important encouraging feature of ROSBANK is that it is growing profits. Now, you could try to make up your mind on ROSBANK by focusing on just these factors, or you could also consider how its price-to-earnings ratio compares to other companies in its industry.
Although ROSBANK 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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