If EPS Growth Is Important To You, Bank of Cyprus Holdings (CSE:BOCH) Presents An Opportunity

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. But as Peter Lynch said in One Up On Wall Street, ‘Long shots almost never pay off.’ A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

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 Bank of Cyprus Holdings (CSE:BOCH). While this doesn’t necessarily speak to whether it’s undervalued, the profitability of the business is enough to warrant some appreciation – especially if its growing.

View our latest analysis for Bank of Cyprus Holdings

Bank of Cyprus Holdings’ Improving Profits

Bank of Cyprus Holdings has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn’t be a fair assessment of the company’s future. So it would be better to isolate the growth rate over the last year for our analysis. In impressive fashion, Bank of Cyprus Holdings’ EPS grew from €0.067 to €0.16, over the previous 12 months. It’s a rarity to see 139% year-on-year growth like that.

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. It’s noted that Bank of Cyprus Holdings’ revenue from operations was lower than its revenue in the last twelve months, so that could distort our analysis of its margins. Bank of Cyprus Holdings maintained stable EBIT margins over the last year, all while growing revenue 25% to €651m. That’s encouraging news for the company!

You can take a look at the company’s revenue and earnings growth trend, in the chart below. For finer detail, click on the image.

The trick, as an investor, is to find companies that are going to perform well in the future, not just in the past. While crystal balls don’t exist, you can check our visualization of consensus analyst forecasts for Bank of Cyprus Holdings’ future EPS 100% free.

Are Bank of Cyprus Holdings 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. Because often, the purchase of stock is a sign that the buyer views it as undervalued. However, small purchases are not always indicative of conviction, and insiders don’t always get it right.

Any way you look at it Bank of Cyprus Holdings shareholders can gain quiet confidence from the fact that insiders shelled out €264k to buy stock, over the last year. And when you consider that there was no insider selling, you can understand why shareholders might believe that there are brighter days ahead. We also note that it was the Senior Independent Director, Constantine Iordanou, who made the biggest single acquisition, paying €167k for shares at about €1.65 each.

Should You Add Bank of Cyprus Holdings To Your Watchlist?

Bank of Cyprus Holdings’ earnings per share have been soaring, with growth rates sky high. Growth investors should find it difficult to look past that strong EPS move. And in fact, it could well signal a fundamental shift in the business economics. If this these factors intrigue you, then an addition of Bank of Cyprus Holdings to your watchlist won’t go amiss. However, before you get too excited we’ve discovered 2 warning signs for Bank of Cyprus Holdings that you should be aware of.

Keen growth investors love to see insider buying. Thankfully, Bank of Cyprus Holdings isn’t the only one. You can see a a free list of them here.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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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.