Yahoo Finance With EPS Growth And More, NTG Clarity Networks (CVE:NCI) Makes An Interesting Case
For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and 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. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.
Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like NTG Clarity Networks (CVE:NCI). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.
See our latest analysis for NTG Clarity Networks
How Fast Is NTG Clarity Networks Growing Its Earnings Per Share?
In the last three years NTG Clarity Networks' 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. As a result, we'll zoom in on growth over the last year, instead. To the delight of shareholders, NTG Clarity Networks' EPS soared from CA$0.0091 to CA$0.015, over the last year. That's a fantastic gain of 65%.
It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. NTG Clarity Networks maintained stable EBIT margins over the last year, all while growing revenue 57% to CA$25m. That's encouraging news for the company!
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.
Since NTG Clarity Networks is no giant, with a market capitalisation of CA$10m, you should definitely check its cash and debt before getting too excited about its prospects.
Are NTG Clarity Networks Insiders Aligned With All Shareholders?
Investors are always searching for a vote of confidence in the companies they hold and insider buying is one of the key indicators for optimism on the market. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.
Any way you look at it NTG Clarity Networks shareholders can gain quiet confidence from the fact that insiders shelled out CA$475k to buy stock, over the last year. When you contrast that with the complete lack of sales, it's easy for shareholders to be brimming with joyful expectancy. We also note that it was the Founder, Ashraf Zaghloul, who made the biggest single acquisition, paying CA$135k for shares at about CA$0.03 each.
Does NTG Clarity Networks Deserve A Spot On Your Watchlist?
You can't deny that NTG Clarity Networks has grown its earnings per share at a very impressive rate. That's attractive. Not only is that growth rate rather juicy, but the insider buying adds fuel to the fire. To put it succinctly; NTG Clarity Networks is a strong candidate for your watchlist. Don't forget that there may still be risks. For instance, we've identified 6 warning signs for NTG Clarity Networks (3 are a bit concerning) you should be aware of.
There are plenty of other companies that have insiders buying up shares. So if you like the sound of NTG Clarity Networks, you'll probably love this curated collection of companies in CA that have witnessed growth alongside insider buying in the last three months.
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.
