Here’s why we think Surgical Science Sweden (STO: SUS) is well worth a look
For starters, it may seem like a good idea (and an exciting perspective) to buy a company that tells a good story for investors, even if it completely lacks track record in terms of revenue and profit. And in their study with the title Who falls victim to the wolf on Wall Street? ‘ Leuz et. al. found that it is “quite common” for investors to lose money by buying into “pump and dump” systems.
In contrast to all that, I prefer to spend time on companies like Surgical Science Sweden (STO: SUS), which not only has revenue, but also profits. While that does not make the stock worth buying at any price, you can not deny that successful capitalism demands profit, eventually. While a well-funded business can suffer losses for several years, unless its owner has an endless appetite to subsidize the customer, it will need to generate a profit eventually, or else exhale its last breath.
See our latest analysis for Surgical Science Sweden
How fast is Surgical Science Sweden growing its earnings per share?
In business, but not in life, profits are a key measure of success; and stock prices tend to reflect earnings per share (EPS). Like a ray of sunshine through a gap in the clouds, improved EPS is considered a good sign. It is therefore impressive that Surgical Science Sweden’s EPS went from SEK 0.45 to SEK 1.70 in just one year. When you see that revenue is growing so fast, it often means good things going forward for the company. But the key is to determine if something profound has changed, or if this is just a one-time reinforcement.
Careful consideration of revenue growth and profit before interest and tax (EBIT) margins can help inform about the sustainability of recent profit growth. Surgical Science Sweden’s shareholders can trust the fact that EBIT margins have risen from 20% to 23%, and revenues are growing. Checking the two boxes is a good sign of growth, in my book.
You can take a look at the company’s revenue and profit growth trend, in the chart below. To see the actual numbers, click on the chart.
When it comes to investing, as in life, the future is more important than the past. So why not check this out free interactive visualization of Surgical Science Sweden forecast profits?
Are Surgical Science Sweden insiders in line with all shareholders?
It makes me feel safer to own shares in a company if insiders also own shares, which makes our interests more united. As a result, I am encouraged by the fact that insiders own Surgical Science Sweden shares worth a considerable sum. It is noteworthy that they have a huge share in the company, worth SEK 2.8 billion. This corresponds to 29% of the company, which makes insiders powerful and in line with other shareholders. Very encouraging.
Is Surgical Science Sweden worth keeping an eye on?
Surgical Science Sweden’s revenues have gained momentum like any random cryptocurrency, as early as 2017. That kind of growth is nothing short of eye-catching, and the large investment held by insiders really gilds my view of the company. Sometimes rapid EPS growth is a sign that the business has reached a turning point; and I like them. So in my opinion, Surgical Science Sweden is worth adding to your watch list; after all, shareholders are doing well when the market underestimates fast-growing companies. We should say that we have discovered 2 warning signs for Surgical Science Sweden which you should be aware of before investing here.
You can invest in any company you want. But if you prefer to focus on stocks that have shown insider buying, here is a list of insider buying companies over the past three months.
Note that 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 comments based on historical data and analyst forecasts only using an impartial method and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any shares and does not take into account your goals or your financial situation. We strive to provide you with long-term focused analysis driven by basic data. Please note that our analysis may not take into account the latest price sensitive company announcements or qualitative material. Simply Wall St has no position in any of the shares mentioned.