For starters, it might seem like a good idea (and an exciting prospect) to buy a company that tells investors a good story, even if it currently lacks a track record of revenue and earnings. But the reality is that when a company loses money every year, for long enough, its investors will usually take their share of those losses. Although a well-funded business may suffer losses for years, it will eventually have to turn a profit or investors will move on and the business will wither away.
If this type of business isn’t your style, and you like businesses that generate revenue or even profit, then you might be interested in Genovis AB (ed.) (STO:GENO). Even if this company is correctly valued by the market, investors agree that generating consistent earnings will continue to provide Genovis AB (publ.) with the means to add long-term shareholder value.
See our latest review for Genovis AB (publ.)
Improving Genovis AB Profits (publ.)
In business, profits are a key measure of success; and stock prices tend to reflect earnings per share (EPS) performance. This is why EPS growth is viewed so favorably. It is impressive that the EPS of Genovis AB (publ.) has increased from 0.14 kr to 0.56 kr in just one year. Even though this rate of growth cannot be repeated, it looks like a breakout improvement. Could this be a sign that the company has reached an inflection point?
It is often useful to look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another idea of the quality of the company’s growth. The music to Genovis AB (publ.) shareholders’ ears is that EBIT margins have risen from 13% to 29% in the last 12 months and revenues are also on an upward trend. These are two great indicators to check for potential growth.
In the table below, you can see how the company has increased its profits and revenue over time. To see the actual numbers, click on the chart.
As we live in the moment, there is no doubt that the future matters most in the investment decision process. So why not check out this interactive chart outlining future EPS estimates, for Genovis AB (publ.)?
Are Genovis AB (publ.) insiders aligned with all shareholders?
Investors are always looking for a vote of confidence in the companies they own and insider buying is one of the main indicators of optimism in the market. Indeed, insider buying often indicates that those closest to the company are confident that the stock price will perform well. However, insiders are sometimes wrong and we don’t know the exact logic behind their acquisitions.
A good takeaway for shareholders is that company insiders within Genovis AB (publ.) collectively spent 468,000 kr to acquire shares in the company. While this investment may be modest, it is significant given the lack of insider sales. We also note that it was the General Counsel, Susanne Ahlberg, who made the largest acquisition, paying 320,000 kr for shares at around 45.75 kr each.
Besides insider buying, another encouraging sign for Genovis AB (publ.) is that insiders, as a group, hold a significant stake. Indeed, they hold for 499 million kr of its stock. That’s a lot of money, and no small incentive to work hard. As a percentage, this represents 16% of the shares issued for the company, a significant amount given the market capitalization.
While insiders are apparently happy to hold and accumulate stocks, that’s only part of the bigger picture. Indeed, according to our analysis, CEO Fredrik Olsson is paid less than the median for companies of similar size. Our analysis revealed that the median total compensation of CEOs of companies like Genovis AB (publ.) with market capitalizations between 1.1 billion and 4.2 billion kr is around 4.7 million kr.
The CEO of Genovis AB (publ.) received 2.4 million kr in compensation for the year ending December 2021. This is below average for companies of similar size and seems quite reasonable. While the level of CEO compensation should not be the most important factor in how the company is perceived, modest compensation is positive, as it suggests that the board has the best interests in mind. shareholders. It can also be a sign of good governance more generally.
Should you add Genovis AB (publ.) to your watch list?
Earnings per share of Genovis AB (publ.) soared, with dizzying growth rates. To make matters even better, company insiders who know the company best have put their faith in its future and bought more shares. This quick overview suggests that the company may be in good quality, and also at an inflection point, so perhaps Genovis AB (publ.) deserves some timely attention. Another important measure of company quality that is not covered here is return on equity (ROE). Click on this link to see how Genovis AB (publ.) compares to its industry peers in terms of ROE.
There are many other companies whose insiders buy shares. So if you like the sound of Genovis AB (publ.), you’ll probably love this one free list of growing companies insiders are buying.
Please note that insider trading discussed in this article refers to reportable trading in the relevant jurisdiction.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.