Here's Why We Think Vend Marketplaces (OB:VENDA) Is Well Worth Watching

It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Vend Marketplaces (OB:VENDA). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Vend Marketplaces with the means to add long-term value to shareholders.

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How Fast Is Vend Marketplaces Growing Its Earnings Per Share?

In the last three years Vend Marketplaces' 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. So it would be better to isolate the growth rate over the last year for our analysis. In impressive fashion, Vend Marketplaces' EPS grew from kr5.02 to kr11.00, over the previous 12 months. It's not often a company can achieve year-on-year growth of 119%.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. Vend Marketplaces maintained stable EBIT margins over the last year, all while growing revenue 17% to kr8.4b. That's a real positive.

You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.

View our latest analysis for Vend Marketplaces

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 Vend Marketplaces' future EPS 100% free.

Are Vend Marketplaces 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, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.

It's nice to see that there have been no reports of any insiders selling shares in Vend Marketplaces in the previous 12 months. Add in the fact that Satu Kiiskinen, the Independent Director of the company, paid kr346k for shares at around kr346 each. Purchases like this can help the investors understand the views of the management team; in which case they see some potential in Vend Marketplaces.

Should You Add Vend Marketplaces To Your Watchlist?

Vend Marketplaces' earnings per share growth have been climbing higher at an appreciable rate. Most growth-seeking investors will find it hard to ignore that sort of explosive EPS growth. And in fact, it could well signal a fundamental shift in the business economics. If that's the case, you may regret neglecting to put Vend Marketplaces on your watchlist. What about risks? Every company has them, and we've spotted 2 warning signs for Vend Marketplaces (of which 1 is a bit unpleasant!) you should know about.

Keen growth investors love to see insider activity. Thankfully, Vend Marketplaces isn't the only one. You can see a a curated list of Norwegian companies which have exhibited consistent growth accompanied by high insider ownership.

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.