Yahoo Finance We Ran A Stock Scan For Earnings Growth And AirIQ (CVE:IQ) Passed With Ease
The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. 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. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.
So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like AirIQ (CVE:IQ). While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.
See our latest analysis for AirIQ
How Fast Is AirIQ Growing Its Earnings Per Share?
Investors and investment funds chase profits, and that means share prices tend rise with positive earnings per share (EPS) outcomes. So a growing EPS generally brings attention to a company in the eyes of prospective investors. Commendations have to be given in seeing that AirIQ grew its EPS from CA$0.026 to CA$0.12, in one short year. When you see earnings grow that quickly, it often means good things ahead for the company. But the key is discerning whether something profound has changed, or if this is a just a one-off boost.
One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. EBIT margins for AirIQ remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 15% to CA$5.6m. That's progress.
The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.
Since AirIQ is no giant, with a market capitalisation of CA$11m, you should definitely check its cash and debt before getting too excited about its prospects.
Are AirIQ 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. Because often, the purchase of stock is a sign that the buyer views it as undervalued. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.
A great takeaway for shareholders is that company insiders within AirIQ have collectively spent CA$31k acquiring shares in the company. This might not be a huge sum, but it's well worth noting anyway, given the complete lack of selling. We also note that it was the Independent Director, Gabriel Bouchard-Phillips, who made the biggest single acquisition, paying CA$16k for shares at about CA$0.36 each.
Is AirIQ Worth Keeping An Eye On?
AirIQ's 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 indeed, it could be a sign that the business is at an inflection point. If that's the case, you may regret neglecting to put AirIQ on your watchlist. We should say that we've discovered 4 warning signs for AirIQ (2 don't sit too well with us!) that you should be aware of before investing here.
The good news is that AirIQ is not the only growth stock with insider buying. Here's a list of growth-focused companies in CA with 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.
