Investors are often guided by the idea of discovering ‘the next big thing’, even if that means buying ‘story stocks’ without any revenue, let alone profit. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. 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.

If this kind of company isn’t your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Helia Group (ASX:HLI). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Helia Group with the means to add long-term value to shareholders.

See our latest analysis for Helia Group

How Fast Is Helia Group Growing Its Earnings Per Share?

In the last three years Helia Group’s 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, Helia Group’s EPS grew from AU$0.47 to AU$0.88, over the previous 12 months. It’s not often a company can achieve year-on-year growth of 87%. That could be a sign that the business has reached a true inflection point.

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. Helia Group shareholders can take confidence from the fact that EBIT margins are up from 81% to 95%, and revenue is growing. Both of which are great metrics to check off for potential growth.

The chart below shows how the company’s bottom and top lines have progressed over time. Click on the chart to see the exact numbers.



Of course the knack is to find stocks that have their best days in the future, not in the past. You could base your opinion on past performance, of course, but you may also want to check this interactive graph of professional analyst EPS forecasts for Helia Group.

Are Helia Group Insiders Aligned With All Shareholders?

It’s said that there’s no smoke without fire. For investors, insider buying is often the smoke that indicates which stocks could set the market alight. 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.

We note that Helia Group insiders spent AU$283k on stock, over the last year; in contrast, we didn’t see any selling. That’s nice to see, because it suggests insiders are optimistic. It is also worth noting that it was CEO, MD & Director Pauline Blight-Johnston who made the biggest single purchase, worth AU$204k, paying AU$2.93 per share.

Is Helia Group Worth Keeping An Eye On?

Helia Group’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 Helia Group to your watchlist won’t go amiss. Even so, be aware that Helia Group is showing 4 warning signs in our investment analysis , and 2 of those are potentially serious…

There are plenty of other companies that have insiders buying up shares. So if you like the sound of Helia Group, 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.