We Ran A Stock Scan For Earnings Growth And SSH Group (ASX:SSH) Passed With Ease
For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.
So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like SSH Group (ASX:SSH). While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.
SSH Group's Improving Profits
Over the last three years, SSH Group has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. So it would be better to isolate the growth rate over the last year for our analysis. To the delight of shareholders, SSH Group's EPS soared from AU$0.0099 to AU$0.015, over the last year. That's a commendable gain of 50%.
One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. EBIT margins for SSH Group remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 3.2% to AU$42m. That's encouraging news for the company!
The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.
View our latest analysis for SSH Group
Since SSH Group is no giant, with a market capitalisation of AU$18m, you should definitely check its cash and debt before getting too excited about its prospects.
Are SSH Group Insiders Aligned With All Shareholders?
Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. Because often, the purchase of stock is a sign that the buyer views it as undervalued. Of course, we can never be sure what insiders are thinking, we can only judge their actions.
It's good to see SSH Group insiders walking the walk, by spending AU$619k on shares in just twelve months. This, combined with the lack of sales from insiders, should be a great signal for shareholders in what's to come. Zooming in, we can see that the biggest insider purchase was by company insider Ross Stewart Norgard for AU$528k worth of shares, at about AU$0.11 per share.
It's commendable to see that insiders have been buying shares in SSH Group, but there is more evidence of shareholder friendly management. To be specific, the CEO is paid modestly when compared to company peers of the same size. For companies with market capitalisations under AU$286m, like SSH Group, the median CEO pay is around AU$460k.
SSH Group's CEO took home a total compensation package worth AU$342k in the year leading up to June 2025. That is actually below the median for CEO's of similarly sized companies. CEO compensation is hardly the most important aspect of a company to consider, but when it's reasonable, that gives a little more confidence that leadership are looking out for shareholder interests. Generally, arguments can be made that reasonable pay levels attest to good decision-making.
Is SSH Group Worth Keeping An Eye On?
For growth investors, SSH Group's raw rate of earnings growth is a beacon in the night. To add to the positives, SSH Group has recorded instances of insider buying and a modest executive pay to boot. All in all, this stock is worth the time to delve deeper into the details. However, before you get too excited we've discovered 2 warning signs for SSH Group (1 is a bit concerning!) that you should be aware of.
The good news is that SSH Group is not the only stock with insider buying. Here's a list of small cap, undervalued companies in AU with insider buying in the last three months!
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
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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.