With EPS Growth And More, Daseke (NASDAQ:DSKE) is interesting
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. And in their study titled Who falls prey to the wolf of Wall Street? » Leuz and. al. found that it is “fairly common” for investors to lose money by buying into “pump and dump” schemes.
Contrary to all that, I prefer to spend time on companies like Daseke (NASDAQ:DSKE), which not only generates revenue, but also profits. Even if stocks are fully valued today, most capitalists would recognize its earnings as a demonstration of consistent value generation. In comparison, loss-making companies act like a sponge for capital – but unlike such a sponge, they don’t always produce something when pressed.
Check out our latest analysis for Daseke
Improved Daseke Profits
In a capitalist society, capital drives out profits, which means stock prices tend to rise with earnings per share (EPS). So like the hint of a smile on a face I love, growing EPS usually makes me look twice. So you can imagine it almost knocked my socks off when I realized that Daseke had increased its EPS from US$0.13 to US$1.12, 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?
A careful look at revenue growth and earnings before interest and tax (EBIT) margins can help inform a view on the sustainability of recent earnings growth. I note that income from Daseke operations was lower than its turnover over the last twelve months, which could distort my analysis of its margins. The good news is that Daseke is increasing revenue and EBIT margins have improved by 2.6 percentage points to 6.5% compared to last year. Checking those two boxes is a good sign of growth, in my book.
You can check the company’s revenue and profit growth trend in the table below. To see the actual numbers, click on the chart.
In investing, as in life, the future matters more than the past. So why not check this out free interactive visualization of Daseke provide profits?
Are Daseke insiders aligned with all shareholders?
I like that business leaders have some skin in the game, so to speak, because it increases the alignment of incentives between the people running the business and its true owners. Accordingly, I am encouraged that insiders hold Daseke shares of considerable value. To be precise, they own $22 million worth of stock. It shows strong buy-in and can indicate belief in the business strategy. This represents 5.1% of the company, demonstrating a high degree of alignment with shareholders.
Does Daseke deserve a spot on your watch list?
Daseke’s earnings per share growth is levitating, like a mountain goat climbing the Alps. This EPS growth is certainly getting my attention, and the large insider ownership only serves to further pique my interest. Sometimes rapid EPS growth is a sign that the business has reached an inflection point; and I like those. So yes, on this short analysis, I think it’s worth considering Daseke for a spot on your watch list. However, before you get too excited, we found out 2 warning signs for Daseke of which you should be aware.
While Daseke certainly 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 are looking for.
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.