Does Concrete Pumping Holdings (NASDAQ:BBCP) Deserve A Spot On Your Watchlist?
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. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.
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 Concrete Pumping Holdings (NASDAQ:BBCP). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Concrete Pumping Holdings with the means to add long-term value to shareholders.
View our latest analysis for Concrete Pumping Holdings
How Fast Is Concrete Pumping Holdings Growing Its Earnings Per Share?
In the last three years Concrete Pumping Holdings' 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. In impressive fashion, Concrete Pumping Holdings' EPS grew from US$0.25 to US$0.55, over the previous 12 months. Year on year growth of 124% is certainly a sight to behold.
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. While we note Concrete Pumping Holdings achieved similar EBIT margins to last year, revenue grew by a solid 20% to US$421m. That's a real positive.
The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.
You don't drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for Concrete Pumping Holdings' future profits.
Are Concrete Pumping Holdings Insiders Aligned With All Shareholders?
It's pleasing to see company leaders with putting their money on the line, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. So it is good to see that Concrete Pumping Holdings insiders have a significant amount of capital invested in the stock. Indeed, they hold US$34m worth of its stock. That's a lot of money, and no small incentive to work hard. As a percentage, this totals to 7.5% of the shares on issue for the business, an appreciable amount considering the market cap.
While it's always good to see some strong conviction in the company from insiders through heavy investment, it's also important for shareholders to ask if management compensation policies are reasonable. Our quick analysis into CEO remuneration would seem to indicate they are. The median total compensation for CEOs of companies similar in size to Concrete Pumping Holdings, with market caps between US$200m and US$800m, is around US$2.3m.
Concrete Pumping Holdings' CEO took home a total compensation package of US$1.1m in the year prior to October 2022. That looks like a modest pay packet, and may hint at a certain respect for the interests of shareholders. CEO compensation is hardly the most important aspect of a company to consider, but when it's reasonable, that gives a little more confidence that leadership are looking out for shareholder interests. It can also be a sign of a culture of integrity, in a broader sense.
Should You Add Concrete Pumping Holdings To Your Watchlist?
Concrete Pumping Holdings' earnings have taken off in quite an impressive fashion. The cherry on top is that insiders own a bucket-load of shares, and the CEO pay seems really quite reasonable. The strong EPS improvement suggests the businesses is humming along. Concrete Pumping Holdings is certainly doing some things right and is well worth investigating. We should say that we've discovered 1 warning sign for Concrete Pumping Holdings that you should be aware of before investing here.
There's always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that do have those features. You can access a free list of them here.
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.
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