November 27, 2021

Remarkable Mate

Remarkable business & finance

If You Like EPS Growth Then Check Out Beijer Ref (STO:BEIJ B) Before It’s Too Late

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.

In the age of tech-stock blue-sky investing, my choice may seem old fashioned; I still prefer profitable companies like Beijer Ref (STO:BEIJ B). While profit is not necessarily a social good, it’s easy to admire a business that can consistently produce it. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.

Check out our latest analysis for Beijer Ref

How Quickly Is Beijer Ref Increasing Earnings Per Share?

As one of my mentors once told me, share price follows earnings per share (EPS). It’s no surprise, then, that I like to invest in companies with EPS growth. Beijer Ref managed to grow EPS by 6.5% per year, over three years. While that sort of growth rate isn’t amazing, it does show the business is growing.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. While we note Beijer Ref’s EBIT margins were flat over the last year, revenue grew by a solid 14% to kr16b. That’s a real positive.

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.

OM:BEIJ B Earnings and Revenue History October 28th 2021

The trick, as an investor, is to find companies that are going to perform well in the future, not just in the past. To that end, right now and today, you can check our visualization of consensus analyst forecasts for future Beijer Ref EPS 100% free.

Are Beijer Ref Insiders Aligned With All Shareholders?

We would not expect to see insiders owning a large percentage of a kr68b company like Beijer Ref. But we do take comfort from the fact that they are investors in the company. Indeed, they have a glittering mountain of wealth invested in it, currently valued at kr3.9b. This suggests to me that leadership will be very mindful of shareholders’ interests when making decisions!

Should You Add Beijer Ref To Your Watchlist?

One positive for Beijer Ref is that it is growing EPS. That’s nice to see. If that’s not enough on its own, there is also the rather notable levels of insider ownership. That combination appeals to me, for one. So yes, I do think the stock is worth keeping an eye on. Still, you should learn about the 2 warning signs we’ve spotted with Beijer Ref (including 1 which is potentially serious) .

You can invest in any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies 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.

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.

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https://simplywall.st/stocks/se/capital-goods/sto-beij-b/beijer-ref-shares/news/if-you-like-eps-growth-then-check-out-beijer-ref-stobeij-b-b