Scandinavian Enviro Systems' (STO:SES) Strong Earnings Are Of Good Quality

Scandinavian Enviro Systems AB (publ) (STO:SES) announced strong profits, but the stock was stagnant. We did some digging, and we found some concerning factors in the details.

View our latest analysis for Scandinavian Enviro Systems

Our Take On Scandinavian Enviro Systems' Profit Performance

Because of this, we think that it may be that Scandinavian Enviro Systems' statutory profits are better than its underlying earnings power. So while earnings quality is important, it's equally important to consider the risks facing Scandinavian Enviro Systems at this point in time. In terms of investment risks, we've identified 1 warning sign with Scandinavian Enviro Systems, and understanding this should be part of your investment process.

Our examination of Scandinavian Enviro Systems has focussed on certain factors that can make its earnings look better than they are. But there are plenty of other ways to inform your opinion of a company. Some people consider a high return on equity to be a good sign of a quality business. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks with high insider ownership.

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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.