If EPS Growth Is Important To You, Beijer Alma (STO:BEIA B) Presents An Opportunity

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Beijer Alma (STO:BEIA B). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.

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Beijer Alma's Earnings Per Share Are Growing

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Beijer Alma managed to grow EPS by 8.2% per year, over three years. That's a good rate of growth, if it can be sustained.

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. Beijer Alma maintained stable EBIT margins over the last year, all while growing revenue 6.0% to kr7.5b. That's a real positive.

You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.

Check out our latest analysis for Beijer Alma

In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of Beijer Alma's forecast profits?

Are Beijer Alma Insiders Aligned With All Shareholders?

Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.

In the last twelve months Beijer Alma insiders spent kr394k on stock; good news for shareholders. While this investment may be modest, it is great considering the lack of insider selling.

On top of the insider buying, it's good to see that Beijer Alma insiders have a valuable investment in the business. Notably, they have an enviable stake in the company, worth kr2.2b. Coming in at 14% of the business, that holding gives insiders a lot of influence, and plenty of reason to generate value for shareholders. So there is opportunity here to invest in a company whose management have tangible incentives to deliver.

While insiders already own a significant amount of shares, and they have been buying more, the good news for ordinary shareholders does not stop there. That's because on our analysis the CEO, Johnny Alvarsson, is paid less than the median for similar sized companies. Our analysis has discovered that the median total compensation for the CEOs of companies like Beijer Alma with market caps between kr9.4b and kr30b is about kr11m.

The CEO of Beijer Alma was paid just kr400k in total compensation for the year ending December 2024. You could consider this pay as somewhat symbolic, which suggests the CEO does not need a lot of compensation to stay motivated. While the level of CEO compensation shouldn't be the biggest factor in how the company is viewed, modest remuneration is a positive, because it suggests that the board keeps shareholder interests in mind. Generally, arguments can be made that reasonable pay levels attest to good decision-making.

Is Beijer Alma Worth Keeping An Eye On?

One positive for Beijer Alma is that it is growing EPS. That's nice to see. In addition, insiders have been busy adding to their sizeable holdings in the company. These factors alone make the company an interesting prospect for your watchlist, as well as continuing research. You still need to take note of risks, for example - Beijer Alma has 1 warning sign we think you should be aware of.

The good news is that Beijer Alma is not the only stock with insider buying. Here's a list of small cap, undervalued companies in SE 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.