Here’s why we think DB (International) Stock Brokers (NSE: DBSTOCKBRO) are worth watching
Some have more money than sense, they say, so even companies with no revenue, no profit and a history of failures can easily find investors. But as Peter Lynch said in One Up on Wall Street“Long shots almost never pay off.”
So if you’re like me, you might be more interested in profitable and growing businesses, like DB Securities Brokers (International) (NSE: DBSTOCKBRO). Now, I’m not saying the stock is necessarily undervalued today; but I can’t help but appreciate the profitability of the business itself. Conversely, a loss-making business has yet to prove itself with profits, and eventually the sweet milk of outside capital can turn sour.
Check out our latest analysis for DB (International) Stock Brokers
DB (International) Stock Brokers Earnings Improvement
In a capitalist society, capital drives out profits, which means stock prices tend to rise with earnings per share (EPS). So, like a ray of sunshine through a hole in the clouds, improved EPS is considered a good sign. So you can imagine it almost knocked my socks off when I realized that DB (International) Stock Brokers increased their EPS from ₹0.36 to ₹1.90, in a single year. When you see profits growing this quickly, it often means good things for the business. 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. Not all DB (International) Stock Brokers revenue this year is revenue operations, so keep in mind that the revenue and margin figures I used may not be the best representation of the underlying business. While we note that DB (International) Stock Brokers’ EBIT margins have remained flat over the past year, revenue has grown by 85% to ₹273 million. It is progress.
You can check the company’s revenue and profit growth trend in the table below. Click on the table to see the exact numbers.
DB (International) Stock Brokers is not a big company, considering its market capitalization of ₹880 million. It is therefore very important to check the strength of its balance sheet.
Are DB (International) Stock Brokers insiders aligned with all shareholders?
Personally, I like to see high insider ownership in a company, as it suggests that it will be run in the interests of shareholders. So, as you can imagine, the fact that DB (International) Stock Brokers insiders hold a significant number of shares certainly appeals to me. In fact, with 36% of the company to their name, insiders are deeply invested in the company. I take comfort in this type of alignment, as it suggests that the company will be run for the benefit of shareholders. Valued at only ₹880 million DB (International) Stock Brokers is really small for a listed company. So, despite a large proportional stake, insiders only have ₹316 million of shares. It may not be a huge sum, but it should be enough to motivate insiders!
Does DB (International) Stock Brokers deserve a spot on your watchlist?
Earnings per share of DB (International) Stock Brokers took off like a rocket aimed straight at the moon. This type of growth is simply eye-catching, and the significant investment held by insiders certainly informs my view of the company. Sometimes rapid EPS growth is a sign that the business has reached an inflection point; and I like those. So, in my opinion, DB (International) Stock Brokers is worth putting on your watch list; after all, shareholders succeed when the market undervalues fast-growing companies. However, you should always think about the risks. Concrete example, we spotted 3 warning signs for DB (International) Stock Brokers you should be aware.
Although DB (International) Stock Brokers looks good to me, I would prefer insiders buying stocks. If you also like to see insiders buy, then this free list of growing companies that insiders are buying might be exactly what you’re looking for.
Please note that insider trading discussed in this article refers to reportable trading in the relevant jurisdiction.
Feedback on this article? Concerned about content? Get in touch with us directly. You can also email the editorial team (at) Simplywallst.com.
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.