High-tech

Is Now The Time To Put Internet Union (WSE:IUS) On Your Watchlist?

Is Now The Time To Put Internet Union (WSE:IUS) On Your Watchlist?
Written by MAGASIR

It’s common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. Loss making companies can act like a sponge for capital – so investors should be cautious that they’re not throwing good money after bad.

In contrast to all that, many investors prefer to focus on companies like Internet Union (WSE:IUS), which has not only revenues, but also profits. Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Internet Union with the means to add long-term value to shareholders.

See our latest analysis for Internet Union

How Fast Is Internet Union Growing Its Earnings Per Share?

Even with very modest growth rates, a company will usually do well if it improves earnings per share (EPS) year after year. So it’s no surprise that some investors are more inclined to invest in profitable businesses. Over the last year, Internet Union increased its EPS from zł0.29 to zł0.31. That’s a modest gain of 7.7%.

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 Internet Union remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 14% to zł12m. That’s encouraging news for the company!

The chart below shows how the company’s bottom and top lines have progressed over time. For finer detail, click on the image.

earnings-and-revenue-history
WSE: IUS Earnings and Revenue History December 23rd 2022

Internet Union isn’t a huge company, given its market capitalization of zł42m. That makes it extra important to check on its balance sheet strength.

Are Internet Union Insiders Aligned With All Shareholders?

Seeing insiders owning a large portion of the shares on issue is often a good sign. Their incentives will be aligned with the investors and there’s less of a probability in a sudden sell-off that would impact the share price. So those who are interested in Internet Union will be delighted to know that insiders have shown their belief, holding a large proportion of the company’s shares. To be exact, company insiders hold 90% of the company, so their decisions have a significant impact on their investments. Apparently they will be incentivised to plan for the long term – a positive for shareholders with a sit and hold strategy. Valued at only zł42m Internet Union is really small for a listed company. So despite a large proportional holding, insiders only have zł38m worth of stock. That’s not a huge stake in absolute terms, but it should help keep insiders aligned with other shareholders.

Is Internet Union Worth Keeping An Eye On?

One important encouraging feature of Internet Union is that it is growing profits. For those who are looking for a little more than this, the high level of insider ownership enhances our enthusiasm for this growth. These two factors are a huge highlight for the company which should be a strong contender your watchlists. Don’t forget that there may still be risks. For instance, we’ve identified 4 warning signs for Internet Union (3 shouldn’t be ignored) you should be aware of.

The beauty of investing is that you can invest in almost any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies 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.

Valuation is complex, but we’re helping make it simple.

Find out whether Internet Union is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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.

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MAGASIR

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