Some have more money than common sense, they say, so even companies with no income, no profit, and a history of default can easily find investors. But the reality is that when a business loses money every year, for long enough, its investors will usually take their share of those losses.
So if you’re like me, you might be more interested in profitable and growing businesses like Golden sandstorm (TSE: SSL). While profit isn’t necessarily social good, it’s easy to admire a business that can consistently produce it. Conversely, a loss-making company has yet to prove itself with profit, and eventually the sweet milk of external capital can turn sour.
Check out our latest review for Sandstorm Gold
How fast is Sandstorm Gold increasing its earnings per share?
In business, but not in life, profit is a key measure of success; and stock prices tend to reflect earnings per share (EPS). So like the hint of a smile on a face I love, growing EPS usually makes me look twice. So you can imagine that it almost knocked me off the hook when I realized that Sandstorm Gold had increased its EPS from US $ 0.02 to US $ 0.15, in a short year. When profits grow so quickly, it often means good things ahead for the business.
One way to check how a business is growing is to look at how its income and profit before interest and tax (EBIT) have changed. The good news is that Sandstorm Gold is increasing revenue and EBIT margins have improved 19.1 percentage points to 37% over the past year. It’s great to see, on both counts.
In the graph below, you can see how the company has increased its profit and revenue over time. Click on the graph to see the exact numbers.
Of course, the chic is to find stocks that have their best days in the future, not in the past. You can of course base your opinion on past performance, but you can also check out this interactive chart of Professional Analyst EPS Forecasts for Sandstorm Gold.
Are Sandstorm Gold Insiders Aligned With All Shareholders?
I like that business leaders have some skin in the game, so to speak, because it increases the alignment of incentives between the people who run the business and its real owners. So it is good to see that Sandstorm Gold insiders have a significant amount of money invested in the stock. To be precise, they have $ 27 million in stock. That’s a lot of money, and that’s no small incentive to work hard. Although it only represents 1.4% of the business, the value of this investment is enough to show that insiders have a lot going on in the business.
It’s good to see insiders invested in the company, but are the pay levels reasonable? A brief analysis of CEO compensation suggests they are. For companies with a market capitalization between $ 1.0 billion and $ 3.2 billion, like Sandstorm Gold, the median CEO salary is around $ 2.1 million.
Sandstorm Gold offered total compensation worth US $ 1.7 million to its CEO in the year to. Sounds reasonable enough, especially considering it is below the median for companies of a similar size. CEO compensation isn’t the most important aspect of a business to consider, but when it’s reasonable, it gives me a little more confidence that executives are looking out for the interests of shareholders. It can also be a sign of a culture of integrity, in the broad sense.
Does Sandstorm Gold deserve a spot on your watchlist?
Sandstorm Gold profits took off like any random cryptocurrency, in 2017. The icing on the cake is that the insiders own a bunch of stocks and the CEO’s pay really looks quite reasonable. . The strong increase in profits could be a sign of good business momentum. Sandstorm Gold certainly ticks a few of my boxes, so I think it probably deserves a closer look. And the risks? Every business has them, and we’ve spotted 4 warning signs for Sandstorm Gold you should know.
Of course, you can (sometimes) buy stocks that are not growing income and do not have insiders who buy stocks. But as a growth investor, I always like to check out companies that do have these characteristics. You can access a free list of them here.
Please note that the insider dealing discussed in this article refers to reportable trades in the relevant jurisdiction.
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