With EPS Growth And More, B3 Consulting Group (STO:B3) Makes An Interesting Case

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. 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.

In contrast to all that, many investors prefer to focus on companies like B3 Consulting Group (STO:B3), which has not only revenues, but also profits. 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.

See our latest analysis for B3 Consulting Group

How Fast Is B3 Consulting Group Growing Its Earnings Per Share?

B3 Consulting Group 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. As a result, we'll zoom in on growth over the last year, instead. Impressively, B3 Consulting Group's EPS catapulted from kr5.32 to kr11.79, over the last year. It's not often a company can achieve year-on-year growth of 122%.

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. The music to the ears of B3 Consulting Group shareholders is that EBIT margins have grown from 8.2% to 12% in the last 12 months and revenues are on an upwards trend as well. Both of which are great metrics to check off for potential growth.

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.

While we live in the present moment, there's little doubt that the future matters most in the investment decision process. So why not check this interactive chart depicting future EPS estimates, for B3 Consulting Group?

Are B3 Consulting Group Insiders Aligned With All Shareholders?

Investors are always searching for a vote of confidence in the companies they hold and insider buying is one of the key indicators for optimism on the market. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. Of course, we can never be sure what insiders are thinking, we can only judge their actions.

The kr20m worth of shares that insiders sold during the last 12 months pales in comparison to the kr44m they spent on acquiring shares in the company. This adds to the interest in B3 Consulting Group because it suggests that those who understand the company best, are optimistic. It is also worth noting that it was Chairman Sverre Bjerkeli who made the biggest single purchase, worth kr22m, paying kr141 per share.

And the insider buying isn't the only sign of alignment between shareholders and the board, since B3 Consulting Group insiders own more than a third of the company. Owning 37% of the company, insiders have plenty riding on the performance of the the share price. This should be a welcoming sign for investors because it suggests that the people making the decisions are also impacted by their choices. With that sort of holding, insiders have about kr504m riding on the stock, at current prices. That's nothing to sneeze at!

Should You Add B3 Consulting Group To Your Watchlist?

B3 Consulting Group's earnings have taken off in quite an impressive fashion. To make matters even better, the company insiders who know the company best have put their faith in the its future and have been buying more stock. These factors seem to indicate the company's potential and that it has reached an inflection point. We'd suggest B3 Consulting Group belongs near the top of your watchlist. Still, you should learn about the 3 warning signs we've spotted with B3 Consulting Group.

The good news is that B3 Consulting Group is not the only growth stock with insider buying. Here's a list of them... 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.