Do Green Landscaping Group’s (STO:GREEN) Earnings Warrant Your Attention?
It is only natural that many investors, especially those new to the game, would prefer to buy stocks of “sexy” stocks with a good history, even if those companies are losing money. But as Warren Buffett suggested, “If you’ve been playing poker for half an hour and still don’t know who the moron is, you are the moron.” Too often, when buying such story stocks, investors are the weakest.
On the other hand, if you like companies that have revenue and even make profits, then this might interest you Green landscaping group (STO: GREEN). Profit isn’t necessarily a social good, but it’s easy to admire a company that can consistently produce it. Conversely, a loss-making company still has to prove itself with a profit, and at some point the sweet milk of borrowed capital can turn sour.
Check out our latest analysis for the Green Landscaping Group
The profit increase of the Green Landscaping Group
In business, but not in life, profits are an important measure of success; and share prices typically reflect earnings per share (EPS). Like a ray of sunshine through a gap in the cloud, the improvement in EPS is a good sign. It is therefore impressive that the earnings per share of the Green Landscaping Group rose from 0.033 kr to 1.40 kr in just one year. While this rate of growth is unlikely to repeat itself, this looks like a breakthrough improvement. But the key is to see if something has changed profoundly or if this is just a one-off boost.
One way to examine the growth of a company is to look at how sales and earnings before interest and taxes (EBIT) are changing. While the EBIT margins of the Green Landscaping Group remained unchanged last year, sales rose by a solid 28% to 2.4 billion kr. That’s really positive.
In the graph below, you can see how the company has grown revenue and revenue over time. Click on the diagram to see the exact numbers.
OM: GREEN earnings and sales history June 23, 2021
While it is always good to see profits soar, it should always be remembered that a weak balance sheet can attack again. So check the Green Landscaping Group’s balance sheet strength before you get too excited.
Do the insiders of the Green Landscaping Group agree with all shareholders?
Personally, I like high insider ownership of a company as it suggests that it is run in the interests of shareholders. So we’re excited to announce that Green Landscaping Group insiders have a significant stake in the business. In fact, they own 36% of the shares, which makes Insider a very influential group of shareholders. Time and again, such solid inside ownership comforts me as it implies that those who run the business are genuinely motivated to create shareholder value. With this type of participation, insiders have around 1.5 billion kr at current prices. on the stock. That is nothing to be despised!
It means a lot to see insiders invest in the business, but I wonder if the compensation policy is shareholder friendly. Well, based on the CEO salary, I’d say they actually are. For companies with a market capitalization between 1.7 billion kr and 6.8 billion kr. kr, like the Green Landscaping Group, the average CEO salary is around 4.6 million kr.
The CEO of the Green Landscaping Group received compensation of 3.7 million kr at the end of the year. This is below average for companies of similar size and seems pretty reasonable to me. CEO compensation is hardly the most important aspect of a company to consider, but when it’s reasonable it gives me a little more confidence that management is looking after the interests of shareholders. I would also argue that a reasonable salary level generally testifies to good decision-making.
Is it worth keeping an eye on the green landscaping assembly?
Green Landscaping Group’s profits, like any cryptocurrency, skyrocketed in 2017. The sweet thing is that insiders have a mountain of stocks and CEO salaries are pretty reasonable. The strong EPS improvement suggests that business is buzzing along. The Green Landscaping Group certainly meets some of my criteria so I think it is probably worth further consideration. We should say we discovered it 4 warning signs for Green Landscaping Group that you should know before investing here.
Of course, you’re (sometimes) good at buying stocks that are not making profits and have no insiders buying stocks. But as a growth investor, I always enjoy looking at companies that to do have these functions. You can find a free list of them here.
Please note that the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
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