Like a puppy chasing its tail, some new investors are often looking for “the next big thing,” even if that means buying “history stocks” with no revenue, let alone profit. Unfortunately, high-risk investments are often unlikely to ever return, and many investors pay a price to learn their lesson.
So if you’re like me, you might be more interested in profitable and growing companies, like Nolato (STO:NOLA B). Although profit is not necessarily a social good, it is easy to admire a company that can produce it consistently. Loss-making businesses are always in a race against time to achieve financial viability, but time is often the friend of a profitable business, especially if it is growing.
Check out our latest analysis for Nolato
Nolato’s earnings per share increase.
As one of my mentors once told me, stock price follows earnings per share (EPS). So it’s no surprise that I like investing in EPS growth companies. While a tree regularly reaches for the sky, Nolato’s EPS has increased by 20% every year, compounded, over three years. If the company can sustain this type of growth, we expect shareholders to come out on top.
One way to check a company’s growth is to look at the evolution of its revenues and its earnings before interest and taxes (EBIT) margins. While we note that Nolato’s EBIT margins have remained stable over the past year, revenues have increased by 19% to reach 12 billion kr. It is progress.
The chart below shows how the company’s top and bottom line has grown over time. Click on the table to see the exact numbers.
Of course, the trick 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 Nolato.
Are Nolato insiders aligned with all shareholders?
Like standing on the lookout, surveying the horizon at sunrise, insider buying, for some investors, brings joy. Because often buying stocks is a sign that the buyer considers them undervalued. Of course, we can never be sure what insiders are thinking, we can only judge their actions.
Although we saw insider sales (worth -5.7 million kr), this was overshadowed by a mountain of buys, totaling 204 million kr in just one year. This makes me even more interested in Nolato because it suggests that those who understand the business best are optimists. Zooming in, we can see that the biggest insider buy was made by Director Lovisa Hamrin for 46 million kr of shares, at around 92.00 kr per share.
The good news, alongside insider buying, for Nolato bulls is that insiders (collectively) have a significant investment in the stock. Notably, they have a huge stake in the company, worth 3.4 billion kr. Representing 20% of the company, this stake gives insiders plenty of leverage and plenty of reasons to drive shareholder value. It may be my imagination, but I feel the glimmer of opportunity.
Is Nolato worth watching?
You can’t deny that Nolato has been growing its earnings per share at a very impressive rate. It’s attractive. On top of that, insiders have a large stake in the company and have bought more shares. So it’s fair to say that I think this title might well deserve a spot on your watch list. Remember that there may still be risks. For example, we have identified 2 warning signs for Nolato which you should be aware of.
The good news is that Nolato isn’t the only growth stock to buy insiders. Here’s a list…with insider purchases over the past three months!
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.
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