Here’s why we think Media and Games Invest (ETR: M8G) is worth watching
Some have more money than common sense, they say, so even companies with no income, no profit, and a history of failure can easily find investors. And in their study entitled Who is the prey of the Wolf of Wall Street? ‘ Leuz and. Al have found that it is “quite common” for investors to lose money by buying into “pump and dump” programs.
In the age of investing in the blue sky of tech stocks, my choice may seem old-fashioned; I always prefer profitable businesses like Invest in media and games (ETR: M8G). While profit isn’t necessarily social good, it’s easy to admire a business that can consistently produce it. Loss-making businesses always race against time to achieve financial viability, but time is often the friend of the profitable business, especially if it is growing.
Check out our latest review for Media and Games Invest
Improving the profits of Media and Games Invest
In a capitalist society, capital runs after profits, which means that stock prices tend to rise with earnings per share (EPS). So, like a ray of sunlight through a hole in the clouds, improving EPS is considered a good sign. So you can imagine that it almost knocked me off the hook when I realized that Media and Games Invest had increased their EPS from € 0.0026 to € 0.072, in a short year. While this rate of growth is unlikely to repeat itself, it does look like a breakout improvement. But the key is to discern if something deep has changed, or if it’s just a one-time boost.
A close look at growth in income and profit margins before interest and taxes (EBIT) can help inform a vision on the sustainability of recent earnings growth. Shareholders of Media and Games Invest can be confident that EBIT margins are up 4.2% to 10.0% and revenues are growing. Checking those two boxes is a good sign of growth in my book.
The graph below shows how the company’s bottom line has progressed over time. For more details, click on the image.
You don’t drive with your eyes on the rearview mirror, so this may be of more interest to you free report showing analyst forecasts for Media and Games Invest future profits.
Are Media and Games Invest Insiders Aligned with All Shareholders?
Like staying 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 sees them as undervalued. Small purchases aren’t always indicative of conviction, however, and insiders don’t always make the right choices.
Note that last year, insiders sold – € 285,000 in shares. But that’s far less than the 1.5 million euros spent by insiders to buy stocks. I find this encouraging as it suggests that they are optimistic about the future of Media and Games Invest. We also note that it was the independent director, Elizabeth Para, who made the largest acquisition, paying € 188,000 for shares at around € 4.00 each.
Along with insider buying, another encouraging sign for Media and Games Invest is that insiders, as a group, have a significant stake. Indeed, they have invested a sparkling mountain of wealth, currently valued at 137 million euros. This equates to 23% of the company, making insiders powerful and aligned with other shareholders. It may be my imagination, but I feel the glimmer of an opportunity.
Should You Add Media and Gaming Investments to Your Watchlist?
Media and Games Invest’s earnings per share soared, like a mountain goat climbing the Alps. In addition, insiders have a large stake in the company and have bought more shares. This quick overview suggests that the business may be of good quality, and also at an inflection point, so perhaps Media and Games Invest deserves timely attention. Still, you should educate yourself on 2 warning signs we spotted some with Media and Games Invest (including 1 that should not be overlooked).
The good news is that Media and Games Invest isn’t the only growth stock with insider buying. Here’s a list of them … with insider buys over the past three months!
Please note that the insider trading discussed in this article refers to reportable trades 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 using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.