U.S. markets closed
  • S&P Futures

    3,759.00
    +2.25 (+0.06%)
     
  • Dow Futures

    30,007.00
    +25.00 (+0.08%)
     
  • Nasdaq Futures

    11,553.75
    +12.00 (+0.10%)
     
  • Russell 2000 Futures

    1,761.70
    +3.60 (+0.20%)
     
  • Crude Oil

    88.49
    +0.04 (+0.05%)
     
  • Gold

    1,720.00
    -0.80 (-0.05%)
     
  • Silver

    20.77
    +0.11 (+0.53%)
     
  • EUR/USD

    0.9813
    +0.0017 (+0.18%)
     
  • 10-Yr Bond

    3.8260
    +0.0670 (+1.78%)
     
  • Vix

    30.52
    +1.97 (+6.90%)
     
  • GBP/USD

    1.1185
    +0.0017 (+0.15%)
     
  • USD/JPY

    144.9430
    -0.1250 (-0.09%)
     
  • BTC-USD

    20,019.39
    -306.91 (-1.51%)
     
  • CMC Crypto 200

    455.35
    -7.78 (-1.68%)
     
  • FTSE 100

    6,997.27
    -55.35 (-0.78%)
     
  • Nikkei 225

    27,149.76
    -161.54 (-0.59%)
     

Here's Why I Think Civista Bancshares (NASDAQ:CIVB) Is An Interesting Stock

·4 min read

It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks with a good story, even if those businesses lose money. 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.

In contrast to all that, I prefer to spend time on companies like Civista Bancshares (NASDAQ:CIVB), which has not only revenues, but also profits. Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. In comparison, loss making companies act like a sponge for capital - but unlike such a sponge they do not always produce something when squeezed.

See our latest analysis for Civista Bancshares

How Fast Is Civista Bancshares Growing?

As one of my mentors once told me, share price follows earnings per share (EPS). It's no surprise, then, that I like to invest in companies with EPS growth. Civista Bancshares managed to grow EPS by 9.7% per year, over three years. That growth rate is fairly good, assuming the company can keep it up.

I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. I note that Civista Bancshares's revenue from operations was lower than its revenue in the last twelve months, so that could distort my analysis of its margins. Civista Bancshares maintained stable EBIT margins over the last year, all while growing revenue 7.4% to US$113m. That's progress.

In the chart below, you can see how the company has grown earnings, and revenue, over time. To see the actual numbers, click on the chart.

earnings-and-revenue-history
earnings-and-revenue-history

Fortunately, we've got access to analyst forecasts of Civista Bancshares's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are Civista Bancshares Insiders Aligned With All Shareholders?

Like that fresh smell in the air when the rains are coming, insider buying fills me with optimistic anticipation. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. Of course, we can never be sure what insiders are thinking, we can only judge their actions.

Not only did Civista Bancshares insiders refrain from selling stock during the year, but they also spent US$88k buying it. That's nice to see, because it suggests insiders are optimistic. It is also worth noting that it was Barry Boerger who made the biggest single purchase, worth US$59k, paying US$13.50 per share.

Along with the insider buying, another encouraging sign for Civista Bancshares is that insiders, as a group, have a considerable shareholding. Indeed, they hold US$19m worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. Those holdings account for over 5.3% of the company; visible skin in the game.

While insiders already own a significant amount of shares, and they have been buying more, the good news for ordinary shareholders does not stop there. That's because on our analysis the CEO, Dennis Shaffer, is paid less than the median for similar sized companies. I discovered that the median total compensation for the CEOs of companies like Civista Bancshares with market caps between US$200m and US$800m is about US$1.7m.

The Civista Bancshares CEO received total compensation of just US$759k in the year to . That looks like modest pay to me, 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 its reasonable that does give me a little more confidence that leadership are looking out for shareholder interests. I'd also argue reasonable pay levels attest to good decision making more generally.

Does Civista Bancshares Deserve A Spot On Your Watchlist?

One important encouraging feature of Civista Bancshares is that it is growing profits. Better yet, insiders are significant shareholders, and have been buying more shares. That makes the company a prime candidate for my watchlist - and arguably a research priority. You should always think about risks though. Case in point, we've spotted 1 warning sign for Civista Bancshares you should be aware of.

There are plenty of other companies that have insiders buying up shares. So if you like the sound of Civista Bancshares, 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.

This article by Simply Wall St is general in nature. 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.