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 Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.'
If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in Christian Berner Tech Trade (STO:CBTT B). While profit is not necessarily a social good, it's easy to admire a business that can consistently produce it. Loss-making companies are always racing against time to reach financial sustainability, but time is often a friend of the profitable company, especially if it is growing.
See our latest analysis for Christian Berner Tech Trade
How Quickly Is Christian Berner Tech Trade Increasing Earnings Per Share?
If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS). That means EPS growth is considered a real positive by most successful long-term investors. Impressively, Christian Berner Tech Trade has grown EPS by 19% per year, compound, in the last three years. If the company can sustain that sort of growth, we'd expect shareholders to come away winners.
I like to see top-line growth as an indication that growth is sustainable, and I look for a high earnings before interest and taxation (EBIT) margin to point to a competitive moat (though some companies with low margins also have moats). Christian Berner Tech Trade maintained stable EBIT margins over the last year, all while growing revenue 17% to kr659m. That's progress.
You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.
Since Christian Berner Tech Trade is no giant, with a market capitalization of kr525m, so you should definitely check its cash and debt before getting too excited about its prospects.
Are Christian Berner Tech Trade Insiders Aligned With All Shareholders?
I like company leaders to have some skin in the game, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. As a result, I'm encouraged by the fact that insiders own Christian Berner Tech Trade shares worth a considerable sum. Indeed, they hold kr152m worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. Those holdings account for over 29% of the company; visible skin in the game.