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 currently 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.’ While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.
If this kind of company isn’t your style, you like companies that generate revenue, and even earn profits, then you may well be interested in GEK TERNA Holdings Real Estate Construction (ATH:GEKTERNA). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.
How Fast Is GEK TERNA Holdings Real Estate Construction Growing Its Earnings Per Share?
In the last three years GEK TERNA Holdings Real Estate Construction’s earnings per share took off; so much so that it’s a bit disingenuous to use these figures to try and deduce long term estimates. Thus, it makes sense to focus on more recent growth rates, instead. It’s good to see that GEK TERNA Holdings Real Estate Construction’s EPS has grown from €1.58 to €1.80 over twelve months. This amounts to a 14% gain; a figure that shareholders will be pleased to see.
Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it’s a great way for a company to maintain a competitive advantage in the market. While we note GEK TERNA Holdings Real Estate Construction achieved similar EBIT margins to last year, revenue grew by a solid 16% to €3.7b. That’s a real positive.
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.
While it’s always good to see growing profits, you should always remember that a weak balance sheet could come back to bite. So check GEK TERNA Holdings Real Estate Construction’s balance sheet strength, before getting too excited.
Are GEK TERNA Holdings Real Estate Construction Insiders Aligned With All Shareholders?
Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. Of course, we can never be sure what insiders are thinking, we can only judge their actions.
In the last year insider at GEK TERNA Holdings Real Estate Construction were both selling and buying shares; but happily, as a group they spent €90k more on stock, than they netted from selling it. Although some people may hesitate due to the share sales, the fact that insiders bought more than they sold, is a positive thing to note. Zooming in, we can see that the biggest insider purchase was by Executive Vice Chairman Michael Gourzis for €3.5m worth of shares, at about €11.80 per share.
On top of the insider buying, we can also see that GEK TERNA Holdings Real Estate Construction insiders own a large chunk of the company. In fact, they own 35% of the shares, making insiders a very influential shareholder group. Shareholders and speculators should be reassured by this kind of alignment, as it suggests the business will be run for the benefit of shareholders. That level of investment from insiders is nothing to sneeze at.
Does GEK TERNA Holdings Real Estate Construction Deserve A Spot On Your Watchlist?
As previously touched on, GEK TERNA Holdings Real Estate Construction is a growing business, which is encouraging. Better yet, insiders are significant shareholders, and have been buying more shares. That should do plenty in prompting budding investors to undertake a bit more research – or even adding the company to their watchlists. We should say that we’ve discovered 1 warning sign for GEK TERNA Holdings Real Estate Construction that you should be aware of before investing here.
Keen growth investors love to see insider buying. Thankfully, GEK TERNA Holdings Real Estate Construction isn’t the only one. You can see a a curated list of Greek companies which have exhibited consistent growth accompanied by recent insider buying.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
Valuation is complex, but we’re helping make it simple.
Find out whether GEK TERNA Holdings Real Estate Construction is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an 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 account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.