For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it completely lacks a track record of revenue and profit. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.'
So if you're like me, you might be more interested in profitable, growing companies, like JLT Mobile Computers (STO:JLT). While profit is not necessarily a social good, it's easy to admire a business than can consistently produce it. In comparison, loss making companies act like a sponge for capital - but unlike such a sponge they do not always produce something when squeezed.
See our latest analysis for JLT Mobile Computers
How Fast Is JLT Mobile Computers Growing Its Earnings Per Share?
Over the last three years, JLT Mobile Computers has grown earnings per share (EPS) like young bamboo after rain; fast, and from a low base. So I don't think the percent growth rate is particularly meaningful. As a result, I'll zoom in on growth over the last year, instead. Like a falcon taking flight, JLT Mobile Computers's EPS soared from kr0.26 to kr0.37, over the last year. That's a commendable gain of 41%.
One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. While we note JLT Mobile Computers's EBIT margins were flat over the last year, revenue grew by a solid 15% to kr134m. That's progress.
You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.
OM:JLT Income Statement, August 6th 2019
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JLT Mobile Computers isn't a huge company, given its market capitalization of kr162m. That makes it extra important to check on its balance sheet strength.
Are JLT Mobile Computers Insiders Aligned With All Shareholders?
Many consider high insider ownership to be a strong sign of alignment between the leaders of a company and the ordinary shareholders. So as you can imagine, the fact that JLT Mobile Computers insiders own a significant number of shares certainly appeals to me. Actually, with 49% of the company to their names, insiders are profoundly invested in the business. I'm reassured by this kind of alignment, as it suggests the business will be run for the benefit of shareholders. Of course, JLT Mobile Computers is a very small company, with a market cap of only kr162m. So despite a large proportional holding, insiders only have kr79m worth of stock. That's not a huge stake in absolute terms, but it should help keep insiders aligned with other shareholders.
Does JLT Mobile Computers Deserve A Spot On Your Watchlist?
For growth investors like me, JLT Mobile Computers's raw rate of earnings growth is a beacon in the night. I think that EPS growth is something to boast of, and it doesn't surprise me that insiders are holding on to a considerable chunk of shares. Fast growth and confident insiders should be enough to warrant further research. So the answer is that I do think this is a good stock to follow along with. Once you've identified a business you like, the next step is to consider what you think it's worth. And right now is your chance to view our exclusive discounted cashflow valuation of JLT Mobile Computers. You might benefit from giving it a glance today.
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Although JLT Mobile Computers certainly looks good to me, I would like it more if insiders were buying up shares. If you like to see insider buying, too, then this free list of growing companies that insiders are buying, could be exactly what you're looking for.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.
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