Like a puppy chasing its tail, some new investors often chase “the next big thing,” even if that means buying “stocks of history” with no income, let alone profit. And in their study entitled Who is the prey of the Wolf of Wall Street? Leuz and. Al. Found that it is “quite common” for investors to lose money by buying into “pump and dump” programs.
If, on the other hand, you like businesses that have revenue, and even profits, then you might be interested in DorianG (NYSE: GPL). Even if stocks are fully valued today, most capitalists would recognize its benefits as a demonstration of constant value generation. While a well-funded business can suffer losses for years, unless its owners have an endless appetite to subsidize the customer, it will eventually have to generate a profit, or breathe its last breath.
Check out our latest review for DorianG
How fast is DorianG increasing its earnings per share?
Over the past three years, DorianG has increased its earnings per share (EPS) like a young bamboo after the rain; fast, and from a low base. So I don’t think the percentage growth rate is particularly significant. So it makes sense to focus on more recent growth rates instead. DorianG increased its year-over-year EPS from US $ 1.23 to US $ 1.53 last year. I doubt that many are complaining about this 25% gain.
I like to see revenue growth as an indication that growth is sustainable, and I look for a high profit margin before interest and taxes (EBIT) to indicate a competitive gap (although some low-margin companies also have moat). Not all DorianG income this year is income operationsSo keep in mind that the revenue and margin numbers I used may not be the best representation of the underlying business. While we note that DorianG’s EBIT margins have been stable over the past year, revenue increased 13% to US $ 308 million. It’s really positive.
You can check out the revenue and profit growth trend of the company in the chart below. Click on the graph to see the exact numbers.
Fortunately, we have access to the forecasts of the analysts of DorianG future profits. You can make your own predictions without looking, or you can take a look at what the pros are predicting.
Are DorianG insiders aligned with all shareholders?
I like that business leaders have some skin in the game, so to speak, because it increases the alignment of incentives between the people who run the business and its real owners. As a result, I am encouraged that insiders own considerable value DorianG shares. With a whopping $ 98 million in stock as a group, insiders rely heavily on the success of the company. At 15% of the business, insider co-investing gives me confidence that management will make targeted, long-term decisions.
It means a lot to see insiders investing in the company, but I wonder if the compensation policies are shareholder friendly. A brief analysis of CEO compensation suggests they are. For companies with a market capitalization between $ 400 billion and $ 1.6 billion, like DorianG, the median CEO salary is around $ 2.3 million.
The CEO of DorianG received US $ 1.4 million in compensation for the year ending. This is lower than the average for similar sized companies and seems pretty reasonable to me. CEO compensation isn’t the most important aspect of a business to consider, but when it’s reasonable, it gives me a little more confidence that leadership is pursuing the interests of shareholders. I would also say that reasonable pay levels are evidence of good decision making more generally.
Is DorianG worth watching?
As I mentioned before DorianG is a growing company which is what I like to see. Profit growth may be the main game for DorianG, but fun does it do not stop there. With a significant level of insider ownership and reasonable CEO compensation, a reasonable mind might conclude that this is a stock worth watching. Before proceeding to the next step, you should know the 3 warning signs for DorianG (1 makes us a little uncomfortable!) That we have discovered.
Of course, you can (sometimes) buy stocks that are not increased income and do not have insiders who buy stocks. But as a growth investor, I always like to check out companies that do have these characteristics. You can access a free list of them here.
Please note that the insider trading described in this article refers to reportable trades in the relevant jurisdiction.
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