Here’s Why Volt Group (ASX:VPR) Has Caught The Eye Of Investors
May 9, 2025
The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. Loss making companies can act like a sponge for capital – so investors should be cautious that they’re not throwing good money after bad.
Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Volt Group (ASX:VPR). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.
The market is a voting machine in the short term, but a weighing machine in the long term, so you’d expect share price to follow earnings per share (EPS) outcomes eventually. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Impressively, Volt Group has grown EPS by 21% per year, compound, in the last three years. If the company can sustain that sort of growth, we’d expect shareholders to come away satisfied.
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. Volt Group shareholders can take confidence from the fact that EBIT margins are up from 13% to 25%, and revenue is growing. Both of which are great metrics to check off for potential growth.
In the chart below, you can see how the company has grown earnings and revenue, over time. Click on the chart to see the exact numbers.
Check out our latest analysis for Volt Group
Volt Group isn’t a huge company, given its market capitalisation of AU$16m. That makes it extra important to check on its balance sheet strength.
It’s said that there’s no smoke without fire. For investors, insider buying is often the smoke that indicates which stocks could set the market alight. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, small purchases are not always indicative of conviction, and insiders don’t always get it right.
Volt Group top brass are certainly in sync, not having sold any shares, over the last year. But more importantly, Non-Executive Director Simon Higgins spent AU$80k acquiring shares, doing so at an average price of AU$0.0017. Strong buying like that could be a sign of opportunity.
And the insider buying isn’t the only sign of alignment between shareholders and the board, since Volt Group insiders own more than a third of the company. Indeed, with a collective holding of 55%, company insiders are in control and have plenty of capital behind the venture. Intuition will tell you this is a good sign because it suggests they will be incentivised to build value for shareholders over the long term. Of course, Volt Group is a very small company, with a market cap of only AU$16m. That means insiders only have AU$8.9m worth of shares, despite the large proportional holding. This isn’t an overly large holding but it should still keep the insiders motivated to deliver the best outcomes for shareholders.
Shareholders have more to smile about than just insiders adding more shares to their already sizeable holdings. That’s because Volt Group’s CEO, Adam Boyd, is paid at a relatively modest level when compared to other CEOs for companies of this size. Our analysis has discovered that the median total compensation for the CEOs of companies like Volt Group with market caps under AU$313m is about AU$454k.
The CEO of Volt Group only received AU$116k in total compensation for the year ending December 2024. First impressions seem to indicate a compensation policy that is favourable to shareholders. While the level of CEO compensation shouldn’t be the biggest factor in how the company is viewed, modest remuneration is a positive, because it suggests that the board keeps shareholder interests in mind. It can also be a sign of a culture of integrity, in a broader sense.
If you believe that share price follows earnings per share you should definitely be delving further into Volt Group’s strong EPS growth. Moreover, the management and board of the company hold a significant stake in the company, with one party adding to this total. These things considered, this is one stock worth watching. We should say that we’ve discovered 2 warning signs for Volt Group that you should be aware of before investing here.
The good news is that Volt 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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
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