We Ran A Stock Scan For Earnings Growth And AVTECH Sweden (STO:AVT B) Passed With Ease

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.’ 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.

In contrast to all that, many investors prefer to focus on companies like AVTECH Sweden (STO:AVT B), which has not only revenues, but also profits. 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.

View our latest analysis for AVTECH Sweden

How Fast Is AVTECH Sweden Growing Its Earnings Per Share?

Strong earnings per share (EPS) results are an indicator of a company achieving solid profits, which investors look upon favourably and so the share price tends to reflect great EPS performance. Which is why EPS growth is looked upon so favourably. It’s an outstanding feat for AVTECH Sweden to have grown EPS from kr0.023 to kr0.12 in just one year. When you see earnings grow that quickly, it often means good things ahead for the company. This could point to the business hitting a point of inflection.

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. The good news is that AVTECH Sweden is growing revenues, and EBIT margins improved by 18.2 percentage points to 26%, over the last year. That’s great to see, on both counts.

In the chart below, you can see how the company has grown earnings and revenue, over time. To see the actual numbers, click on the chart.

Since AVTECH Sweden is no giant, with a market capitalisation of kr178m, you should definitely check its cash and debt before getting too excited about its prospects.

Are AVTECH Sweden 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. That’s because insider buying often indicates that those closest to the company have confidence that the share price will perform well. However, small purchases are not always indicative of conviction, and insiders don’t always get it right.

In the last twelve months AVTECH Sweden insiders spent kr104k on stock; good news for shareholders. This might not be a huge sum, but it’s well worth noting anyway, given the complete lack of selling. It is also worth noting that it was Independent Director Christer Fehrling who made the biggest single purchase, worth kr36k, paying kr3.56 per share.

Is AVTECH Sweden Worth Keeping An Eye On?

AVTECH Sweden’s earnings have taken off in quite an impressive fashion. Growth-minded people will be intrigued by the incredible movement in EPS growth. And in fact, it could well signal a fundamental shift in the business economics. If this these factors intrigue you, then an addition of AVTECH Sweden to your watchlist won’t go amiss. Don’t forget that there may still be risks. For instance, we’ve identified 3 warning signs for AVTECH Sweden that you should be aware of.

There are plenty of other companies that have insiders buying up shares. So if you like the sound of AVTECH Sweden, you’ll probably love this free list of growing companies that insiders are buying.

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.