Is it time to put Queen’s Road Capital Investment (CVE:QRC) on your watch list?
For starters, it might seem like a good idea (and an exciting prospect) to buy a company that tells investors a good story, even if it completely lacks a track record of revenue and earnings. Unfortunately, high-risk investments are often unlikely to ever return, and many investors pay a price to learn their lesson.
In the era of blue-sky tech-stock investments, my choice may seem old-fashioned; I always prefer profitable companies like Queen’s Road Capital Investment (CVE: QRC). Even if stocks are fully valued today, most capitalists would recognize its earnings as a demonstration of consistent value generation. Conversely, a loss-making business has yet to prove itself with profits, and eventually the sweet milk of outside capital can turn sour.
How fast is Queen’s Road Capital Investment growing 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). So like the hint of a smile on a face I love, growing EPS usually makes me look twice. It is therefore impressive that Queen’s Road Capital Investment‘s EPS rose from US$0.03 to US$0.23 in just one year. While this rate of growth is unlikely to be repeated, it looks like a breakout improvement. Could this be a sign that the company has reached an inflection point?
One way to check a company’s growth is to look at the evolution of its revenues and its earnings before interest and taxes (EBIT) margins. I note that the income from Queen’s Road Capital Investment operations was lower than its turnover over the last twelve months, which could distort my analysis of its margins. The good news is that Queen’s Road Capital Investment is growing its revenue and EBIT margins have improved by 49.8 percentage points to 94% compared to last year. It’s great to see, on both counts.
You can check the company’s revenue and profit growth trend in the table below. For more details, click on the image.
Are Queen’s Road Capital Investment Insiders Aligned with All Shareholders?
Like standing on the lookout, surveying the horizon at sunrise, insider buying, for some investors, brings joy. Because often buying stocks is a sign that the buyer considers them undervalued. Of course, we can never be sure what insiders are thinking, we can only judge their actions.
It’s good to see the insiders at Queen’s Road Capital Investment stepping up to the plate, spending US$391,000 on stocks in just twelve months. When you compare that with the complete lack of sales, it’s easy for shareholders to overflow with joyous expectation. We also note that it was the , Jack Cowin, who made the biggest acquisition, paying C$143,000 for shares at around C$0.63 each.
In addition to insider buying, we can also see that Queen’s Road Capital Investment insiders own a large portion of the business. In fact, with 49% of the company to their name, insiders are deeply invested in the company. I’m always reassured by strong insider ownership like this because it implies that those running the business are genuinely motivated to create shareholder value. With this type of holding, insiders have approximately US$112 million in the stock, at current prices. That should be more than enough to keep them focused on creating shareholder value!
While insiders are apparently happy to hold and accumulate stocks, that’s only part of the pretty picture. Indeed, according to our analysis, CEO Warren Philip Gilman is paid less than the median for companies of a similar size. For companies with a market capitalization between $100 million and $400 million, such as Queen’s Road Capital Investment, the median CEO salary is around $479,000.
The CEO of Queen’s Road Capital Investment received US$316,000 in compensation for the year ending . That seems pretty reasonable, especially given that it’s below the median for companies of a similar size. Although the level of CEO compensation is not a determining factor in my view of the company, modest compensation is positive, as it suggests that the board has the interests of shareholders in mind. It can also be a sign of a culture of integrity, broadly defined.
Is Queen’s Road Capital Investment Worth Watching?
Queen’s Road Capital Investment’s earnings per share growth rose like a mountain goat climbing the Alps. Additionally, insiders have a large stake in the company and have purchased more shares. This quick overview suggests that the company may be in good quality, and also at an inflection point, so perhaps Queen’s Road Capital Investment deserves some timely attention. Even so, know that Queen’s Road capital investment shows 3 warning signs in our investment analysis , and 1 of them concerns…
The good news is that Queen’s Road Capital Investment isn’t the only growth stock buying insiders. here is a list of them… with insider purchases over the past three months!
Please note that insider trading discussed in this article refers to reportable trading in the relevant jurisdiction.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.