Here's Why Genovis AB (publ.) (STO:GENO) Has Caught The Eye Of Investors

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. 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 Genovis AB (publ.) (STO:GENO). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Genovis AB (publ.) with the means to add long-term value to shareholders.

View our latest analysis for Genovis AB (publ.)

How Fast Is Genovis AB (publ.) Growing Its Earnings Per Share?

Genovis AB (publ.) has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. So it would be better to isolate the growth rate over the last year for our analysis. Genovis AB (publ.)'s EPS shot up from kr0.55 to kr0.87; a result that's bound to keep shareholders happy. That's a commendable gain of 58%.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. Genovis AB (publ.) shareholders can take confidence from the fact that EBIT margins are up from 28% to 35%, and revenue is growing. Ticking those two boxes is a good sign of growth, in our book.

The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.

The trick, as an investor, is to find companies that are going to perform well in the future, not just in the past. While crystal balls don't exist, you can check our visualization of consensus analyst forecasts for Genovis AB (publ.)'s future EPS 100% free.

Are Genovis AB (publ.) Insiders Aligned With All Shareholders?

It should give investors a sense of security owning shares in a company if insiders also own shares, creating a close alignment their interests. Genovis AB (publ.) followers will find comfort in knowing that insiders have a significant amount of capital that aligns their best interests with the wider shareholder group. As a matter of fact, their holding is valued at kr450m. That's a lot of money, and no small incentive to work hard. As a percentage, this totals to 17% of the shares on issue for the business, an appreciable amount considering the market cap.

It's good to see that insiders are invested in the company, but are remuneration levels reasonable? Our quick analysis into CEO remuneration would seem to indicate they are. For companies with market capitalisations between kr1.1b and kr4.4b, like Genovis AB (publ.), the median CEO pay is around kr5.1m.

Genovis AB (publ.) offered total compensation worth kr2.7m to its CEO in the year to December 2022. That seems pretty reasonable, especially given it's below the median for similar sized companies. CEO compensation is hardly the most important aspect of a company to consider, but when it's reasonable, that gives a little more confidence that leadership are looking out for shareholder interests. It can also be a sign of good governance, more generally.

Is Genovis AB (publ.) Worth Keeping An Eye On?

You can't deny that Genovis AB (publ.) has grown its earnings per share at a very impressive rate. That's attractive. If you need more convincing beyond that EPS growth rate, don't forget about the reasonable remuneration and the high insider ownership. Everyone has their own preferences when it comes to investing but it definitely makes Genovis AB (publ.) look rather interesting indeed. We don't want to rain on the parade too much, but we did also find 2 warning signs for Genovis AB (publ.) (1 shouldn't be ignored!) that you need to be mindful of.

Although Genovis AB (publ.) certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see insider buying, 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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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.