Is it time to put Basler (ETR: BSL) on your watchlist?
Some have more money than common sense, they say, so even companies with no income, no profit, and a record of failure can easily find investors. And in their study entitled Who is the prey of the Wolf of Wall Street? ‘ Leuz and. Al. Have found that it is “quite common” for investors to lose money by purchasing “pump and dump” programs.
So if you’re like me, you might be more interested in profitable and growing businesses like Basel (ETR: BSL). While that doesn’t make stocks worth buying at all costs, you can’t deny that successful capitalism ultimately requires profits. Conversely, a loss-making company has yet to prove itself with profit, and eventually the sweet milk of external capital can turn sour.
See our latest analysis for Basel
Improved Basler Profits
Even with very modest growth rates, a company will generally do well if it improves its earnings per share (EPS) year over year. So, the growth of EPS can certainly make an investor take note of a security. It is good to see that Basler’s EPS fell from € 1.72 to € 2.02 over twelve months. This is a gain of 17%; respectable growth in all things.
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 ditches). Basler has maintained stable EBIT margins over the past year, while increasing revenue by 23% to 206 million euros. It is progress.
In the graph below, you can see how the company has increased its profit and revenue over time. To see the actual numbers, click on the graph.
Of course, the chic is to find stocks that have their best days in the future, not in the past. You can of course base your opinion on past performance, but you can also check out this interactive chart of Professional Analyst EPS Forecasts for Basel.
Are Basler Insiders Aligned With All Shareholders?
I feel more secure owning shares in a company if insiders also own shares, thereby aligning our interests more closely. As a result, I am encouraged that insiders own Basler shares of considerable value. With 60 million euros in shares as a group, insiders have a lot to do with the success of the company. This should keep them focused on creating long-term shareholder value.
It’s good to see insiders invested in the company, but are the pay levels reasonable? Well, based on CEO pay, I would say they are indeed. For companies with market capitalization between $ 888 million and $ 2.8 billion, like Basler, the median CEO salary is around $ 1.4 million.
The CEO of Basel received only € 499,000 in total compensation for the financial year ended. This is clearly well below par, so at first glance this arrangement seems generous to shareholders and indicates a culture of modest compensation. Although the level of CEO compensation is not a big factor in my view of the company, modest compensation is positive because it suggests that the board has the interests of shareholders in mind. It can also be a sign of good governance, more generally.
Is Basler worth watching?
As I mentioned before, Basel is a growing company, that’s what I like to see. Profit growth may be Basel’s main game, but the fun not stop there. Boasting both a modest CEO salary and considerable insider ownership, I’d say this one at least deserves the watchlist. Of course, profit growth is one thing, but it’s even better if Basler receives high returns on equity, as that should mean he can continue to grow without the need for capital. Click on this link to see how it compares to its industry average.
Of course, you can (sometimes) buy stocks that are not growing income and not have insiders who buy stocks. But as a growth investor, I always like to check out companies that to do have these characteristics. You can access a free list of them here.
Please note that the insider trading discussed in this article refers to reportable trades in the relevant jurisdiction.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative material. Simply Wall St has no position in any of the stocks mentioned.
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