With EPS Growth And More, Pangaea Logistics Solutions (NASDAQ:PANL) Makes An Interesting Case
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. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.
In contrast to all that, many investors prefer to focus on companies like Pangaea Logistics Solutions (NASDAQ:PANL), which has not only revenues, but also profits. 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.
View our latest analysis for Pangaea Logistics Solutions
How Fast Is Pangaea Logistics Solutions Growing Its Earnings Per Share?
Pangaea Logistics Solutions has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. So it would be better to isolate the growth rate over the last year for our analysis. Pangaea Logistics Solutions' EPS has risen over the last 12 months, growing from US$1.53 to US$1.71. That's a 12% gain; respectable growth in the broader scheme of things.
Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. Pangaea Logistics Solutions' EBIT margins have actually improved by 4.6 percentage points in the last year, to reach 16%, but, on the flip side, revenue was down 2.6%. While not disastrous, these figures could be better.
In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.
While we live in the present moment, there's little doubt that the future matters most in the investment decision process. So why not check this interactive chart depicting future EPS estimates, for Pangaea Logistics Solutions?
Are Pangaea Logistics Solutions 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.
Pangaea Logistics Solutions top brass are certainly in sync, not having sold any shares, over the last year. But the bigger deal is that the Lead Independent Director, Carl Boggild, paid US$100k to buy shares at an average price of US$6.14. It seems at least one insider has seen potential in the company's future - and they're willing to put money on the line.
On top of the insider buying, it's good to see that Pangaea Logistics Solutions insiders have a valuable investment in the business. Given insiders own a significant chunk of shares, currently valued at US$71m, they have plenty of motivation to push the business to succeed. That holding amounts to 26% of the stock on issue, thus making insiders influential owners of the business and aligned with the interests of shareholders.
Is Pangaea Logistics Solutions Worth Keeping An Eye On?
One important encouraging feature of Pangaea Logistics Solutions is that it is growing profits. In addition, insiders have been busy adding to their sizeable holdings in the company. That should do plenty in prompting budding investors to undertake a bit more research - or even adding the company to their watchlists. You should always think about risks though. Case in point, we've spotted 2 warning signs for Pangaea Logistics Solutions you should be aware of, and 1 of them can't be ignored.
There are plenty of other companies that have insiders buying up shares. So if you like the sound of Pangaea Logistics Solutions, you'll probably love this free list of growing companies that insiders are buying.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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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