Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story stocks' without revenue, let alone profit. But as Warren Buffett has mused, 'If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.' When they buy such story stocks, investors are all too often the patsy.
In the age of tech-stock blue-sky investing, my choice may seem old fashioned; I still prefer profitable companies like CF Energy (CVE:CFY). While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.
View our latest analysis for CF Energy
If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS). That makes EPS growth an attractive quality for any company. CF Energy managed to grow EPS by 7.3% per year, over three years. While that sort of growth rate isn't amazing, it does show the business is growing.
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. While we note CF Energy's EBIT margins were flat over the last year, revenue grew by a solid 6.8% to CN394m. That's a real positive.
You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.
Since CF Energy is no giant, with a market capitalization of CA$30m, so you should definitely check its cash and debt before getting too excited about its prospects.
Like standing at the lookout, surveying the horizon at sunrise, insider buying, for some investors, sparks joy. 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.
We haven't seen any insiders selling CF Energy shares, in the last year. With that in mind, it's heartening that Yongbiao Ding, the Independent Director of the company, paid CN30k for shares at around CN0.44 each.
On top of the insider buying, we can also see that CF Energy insiders own a large chunk of the company. In fact, they own 55% of the company, so they will share in the same delights and challenges experienced by the ordinary shareholders. This makes me think they will be incentivised to plan for the long term - something I like to see. Of course, CF Energy is a very small company, with a market cap of only CA$30m. That means insiders only have CN16m worth of shares, despite the large proportional holding. That's not a huge stake in absolute terms, but it should help keep insiders aligned with other shareholders.
One positive for CF Energy is that it is growing EPS. That's nice to see. Better yet, insiders are significant shareholders, and have been buying more shares. To me, that all makes it well worth a spot on your watchlist, as well as continuing research. Even so, be aware that CF Energy is showing 3 warning signs in our investment analysis , and 2 of those are significant...
As a growth investor I do like to see insider buying. But CF Energy isn't the only one. You can see a a free list of them here.
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. 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
More here:
Here's Why I Think CF Energy (CVE:CFY) Is An Interesting Stock - Simply Wall St
- Lowe's Teams Up with Lionel Messi, Inter Miami CF and CONMEBOL Copa Amrica 2024 USA to Win Over Soccer ... - Lowes Corporate - April 20th, 2024 [April 20th, 2024]
- Canyon Endurace CF SLX 8 AXS Aero All in the name of speed and distance? - GRAN FONDO Cycling Magazine - April 20th, 2024 [April 20th, 2024]
- Porosome treatment targeting CFTR shows promise in CF models - Cystic Fibrosis News Today - April 20th, 2024 [April 20th, 2024]
- The Reign of Girls Generation's YoonA in Endorsements: The CF Queen - allkpop - April 20th, 2024 [April 20th, 2024]
- Lowe's Teams Up with Lionel Messi, Inter Miami CF and CONMEBOL Copa Amrica 2024 USA to Win Over Ftbol ... - Inter Miami CF - April 20th, 2024 [April 20th, 2024]
- The changing epidemiology of pulmonary infection in children and adolescents with cystic fibrosis: an 18-year ... - Nature.com - April 20th, 2024 [April 20th, 2024]
- Controlling anxiety is a key part of managing my health with CF - Cystic Fibrosis News Today - April 20th, 2024 [April 20th, 2024]
- Orlando City at CF Montreal: Three Keys to Victory - The Mane Land - April 20th, 2024 [April 20th, 2024]
- Learn to Evaluate (CF) using the Charts - Stock Traders Daily - April 20th, 2024 [April 20th, 2024]
- CF Industries and JERA Announce Joint Development Agreement to Develop Greenfield Low-Carbon Ammonia ... - Business Wire - April 20th, 2024 [April 20th, 2024]
- CF Montreal plays Orlando City in conference action - FOX Sports - April 20th, 2024 [April 20th, 2024]
- CF Montral: What is the ceiling for Josef Martnez's new team? | MLSSoccer.com - MLSsoccer.com - April 20th, 2024 [April 20th, 2024]
- Spotlight on CF Industries Holdings: Analyzing the Surge in Options Activity - CF Industries Holdings (NY - Benzinga - April 20th, 2024 [April 20th, 2024]
- Mamardashvili boast the highest spot-kick saves this season - Valencia CF - April 20th, 2024 [April 20th, 2024]
- Jaume Domnech: "I have the VCF DNA inside me" - Valencia CF - April 20th, 2024 [April 20th, 2024]
- MATCH RECAP: Inter Miami CF Earns 2-3 Win on the Road Over Sporting Kansas City at a Packed Arrowhead Stadium - Inter Miami CF - April 20th, 2024 [April 20th, 2024]
- Pavel "The Experiment" Dailidko: Undefeated in 2023 and Charging into BRAVE CF 81 this Saturday, April 20 - Black Belt Magazine - April 20th, 2024 [April 20th, 2024]
- JERA and CF Industries Holdings sing ammonia production deal - SAFETY4SEA - April 20th, 2024 [April 20th, 2024]
- Lowe's Teams Up with Lionel Messi, Inter Miami CF and CONMEBOL Copa Amrica 2024 USA to Win Over Soccer ... - PR Newswire - April 20th, 2024 [April 20th, 2024]
- CF Industries Holdings, Inc. (NYSE:CF) Shares Purchased by Mirae Asset Global Investments Co. Ltd. - Defense World - April 20th, 2024 [April 20th, 2024]
- CF: Milan to jump above Juventus in UEFA ranking for first time in 10 years - Sempre Milan - April 20th, 2024 [April 20th, 2024]
- Color Star's Partner Team Villarreal CF Bests Real Madrid CF Once Again As The Yellow Submarine Maintains Its Impressive Win Record -... - April 19th, 2023 [April 19th, 2023]
- Brave CF 70 Slovenia: Joilton Lutterbach vs. Andreas Gustafsson; Date, fight times, how to watch on DAZN - dazn.com - April 19th, 2023 [April 19th, 2023]
- Malaga CF owner Sheikh Al-Thani vows never to put the club he has run into the ground up for sale - The Olive Press - April 19th, 2023 [April 19th, 2023]
- CF Industries partnering with South Korea firm on $2 billion blue ammonia project in Ascension - The Advocate - March 4th, 2023 [March 4th, 2023]
- Cystic Fibrosis (CF): Causes, Symptoms, Diagnosis & Treatment - February 7th, 2023 [February 7th, 2023]
- Reg CF: 2022 Delivered A Decline For Investment Crowdfunding As Economy Slowed, But Expectations Going - Crowdfund Insider - February 7th, 2023 [February 7th, 2023]
- Cystic fibrosis life expectancy: Averages by stage and age - February 2nd, 2023 [February 2nd, 2023]
- Cystic Fibrosis Carrier: What You Should Know - Healthline - February 2nd, 2023 [February 2nd, 2023]
- Cystic Fibrosis: Prenatal Screening and Diagnosis | ACOG - February 2nd, 2023 [February 2nd, 2023]
- CF Moto to launch a retro mini bike, will compete with Honda Grom in the international markets, all we know so far - DNP INDIA - February 2nd, 2023 [February 2nd, 2023]
- CF Industries Holdings, Inc. (NYSE:CF) Short Interest Down 10.3% in October - MarketBeat - November 16th, 2022 [November 16th, 2022]
- Will CF Industries Holdings, Inc. (CF) Stay at the Top of the Basic Materials Sector? - InvestorsObserver - October 25th, 2022 [October 25th, 2022]
- Wanyama on Sunday played his last match for CF Montreal- Here are potential destinations - The Standard - October 25th, 2022 [October 25th, 2022]
- Scouting Report: 5 things you should know about CF Montral when they play NYCFC in the MLS Cup Playoffs - Hudson River Blue - October 21st, 2022 [October 21st, 2022]
- 2-year-old living with cystic fibrosis helped by new treatments - 11Alive.com WXIA - October 13th, 2022 [October 13th, 2022]
- Phage Trial to Treat CF Patients with Multi-Drug Resistant Bacterial Infections - UC San Diego Health - October 13th, 2022 [October 13th, 2022]
- High Blood-sugar Levels at Night Affect Lung Function in CF Adults... - Cystic Fibrosis News Today - October 13th, 2022 [October 13th, 2022]
- This 7-year-old is finally on a 'life-changing' cystic fibrosis drug. For others in Ontario, access is tricky - CBC.ca - October 13th, 2022 [October 13th, 2022]
- CF's Thomas and Easttam dodge Panthers' high-powered defense, tackle running offense head-on - Camden News - October 13th, 2022 [October 13th, 2022]
- The Difficulties of Diving Back In After Taking a Hiatus | Cystic... - Cystic Fibrosis News Today - October 13th, 2022 [October 13th, 2022]
- Cystic Fibrosis Market to Showcase Growth at a CAGR of 9% During the Forecast Period (2022-2032) | DelveInsight - PR Newswire - October 13th, 2022 [October 13th, 2022]
- Massive Predictions: Columbus Crew at CF Montral - Massive Report - September 9th, 2022 [September 9th, 2022]
- Why CF Acquisition Corp. VI Blasted 14% Higher Today - The Motley Fool - September 9th, 2022 [September 9th, 2022]
- Watch Real Betis vs. Villarreal CF Online: Live Stream, Start Time - For The Win - September 9th, 2022 [September 9th, 2022]
- Watch Getafe CF vs. Real Sociedad Online: Live Stream, Start Time - For The Win - September 9th, 2022 [September 9th, 2022]
- Mauro Icardi linked with move to Inter Miami CF - AS USA - September 9th, 2022 [September 9th, 2022]
- CF Acquisition (NASDAQ:CFVI) Rumble Takes On Traditional Media Outlets With New 'Rumble Exclusives' Liv - Benzinga - September 9th, 2022 [September 9th, 2022]
- SF Giants CF struggles on triple by Klay's brother - SFGATE - July 25th, 2022 [July 25th, 2022]
- CF Industries Holdings, Inc. Statement Regarding ITC Injury Determination Concerning Imports of UAN from Russia and Trinidad and Tobago - Business... - July 25th, 2022 [July 25th, 2022]
- CF man jailed in hit-and-run case - Leader-Telegram - July 25th, 2022 [July 25th, 2022]
- AEG and Socios.com Launch Partnership for the Inaugural Soccer Champions Tour Featuring Real Madrid CF, FC Barcelona, Juventus, Club America and Club... - July 25th, 2022 [July 25th, 2022]
- Taty Castellanos plays his final game for NYCFC in 2-0 home win - Hudson River Blue - July 25th, 2022 [July 25th, 2022]
- Padres' Fernando Tatis Jr.: Position Change to CF from SS 'Not out of the Question' - Bleacher Report - July 25th, 2022 [July 25th, 2022]
- CF Industries Stock: From Boom To Bust - Sell Into The Rallies (NYSE:CF) - Seeking Alpha - June 20th, 2022 [June 20th, 2022]
- CF graduates to chart their own paths to success - Valley Breeze - June 20th, 2022 [June 20th, 2022]
- Poirier: We need the strength of the fans" - Real Madrid CF - June 20th, 2022 [June 20th, 2022]
- Vertex to Present Data Demonstrating Significant Benefits of Long-Term and Early Treatment With CFTR Modulators at the European Cystic Fibrosis... - June 11th, 2022 [June 11th, 2022]
- Jayda Coleman, Oklahoma CF, robs Texas of a home run at the wall - Saturday Down South - June 11th, 2022 [June 11th, 2022]
- Gennaro Gattuso brings tenacity and technique to the Valencia CF dugout - Yardbarker - June 11th, 2022 [June 11th, 2022]
- 77-85: On to the league final - Real Madrid CF - June 11th, 2022 [June 11th, 2022]
- Gator Greats On CF Hall of Fame Ballot - ESPN 98.1 FM - 850 AM WRUF - WRUF - June 11th, 2022 [June 11th, 2022]
- Mariners CF Julio Rodrguez named AL Rookie of the Month for May - Seattle Sports - June 5th, 2022 [June 5th, 2022]
- CF woman charged with theft of trade secrets from former employer - Leader-Telegram - June 5th, 2022 [June 5th, 2022]
- Laso: The team were magnificent in defense" - Real Madrid CF - June 5th, 2022 [June 5th, 2022]
- The Austrian Wonderboy Returns To Action At BRAVE CF 59 in Uzbekistan - FightBook MMA - June 5th, 2022 [June 5th, 2022]
- Son Ye Jin Teases Fans With First CF Since Wedding to Hyun Bin - Kdramastars - June 5th, 2022 [June 5th, 2022]
- Fourth anniversary of the Duodcima - Real Madrid CF - June 5th, 2022 [June 5th, 2022]
- Meet the Avro CF-105 Arrow: The Long-Ranger Fighter Designed to Battle Russia - 19FortyFive - June 5th, 2022 [June 5th, 2022]
- Charlottetown to host professional soccer match between Sunderland AFC, CF Montral U23 teams - Saltwire - June 5th, 2022 [June 5th, 2022]
- Neutrophil Dysfunction in the Pathogenesis of Cystic Fibrosis (CF) - Physician's Weekly - May 21st, 2022 [May 21st, 2022]
- CF Industries Holdings, Inc. (NYSE:CF) Expected to Announce Earnings of $6.16 Per Share - Defense World - May 21st, 2022 [May 21st, 2022]
- Living with Cystic Fibrosis: A CF patient experience story | LHSC - London Health Sciences Centre - May 21st, 2022 [May 21st, 2022]
- CF Montreals Ismal Kon is showing impressive promise early this MLS season - The Athletic - May 21st, 2022 [May 21st, 2022]
- Film produced by CF native to be shown at Micon Cinemas - Leader-Telegram - May 21st, 2022 [May 21st, 2022]
- CF & CFRP Market Research Report by Carbon Fiber Materials, Resin Type, Manufacturing Process, End-use Industry, Region - Global Forecast to 2027... - May 21st, 2022 [May 21st, 2022]
- Experienced defensive backs for CF thriving this off-season - Camden News - May 21st, 2022 [May 21st, 2022]
- The 37th anniversary of Real Madrid's first UEFA Cup - Real Madrid CF - May 21st, 2022 [May 21st, 2022]
- Q&A: How a Cystic fibrosis diagnosis has changed in recent years - WRAL News - May 6th, 2022 [May 6th, 2022]
- Kinnear: Hope, Turning CF Into 'Cure Found' and Betting on the Long Shot - insidelacrosse.com - May 6th, 2022 [May 6th, 2022]