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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. But as Peter Lynch said in One Up On Wall Street, ‘Long shots almost never pay off.’ Loss making companies can act like a sponge for capital – so investors should be cautious that they’re not throwing good money after bad.

In contrast to all that, many investors prefer to focus on companies like Aussie Broadband (ASX:ABB), which has not only revenues, but also profits. 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.

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Over the last three years, Aussie Broadband 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. Aussie Broadband’s EPS has risen over the last 12 months, growing from AU$0.097 to AU$0.11. That’s a 15% gain; respectable growth in the broader scheme of things.

It’s often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company’s growth. Aussie Broadband maintained stable EBIT margins over the last year, all while growing revenue 19% to AU$1.2b. That’s a real positive.

The chart below shows how the company’s bottom and top lines have progressed over time. To see the actual numbers, click on the chart.

View our latest analysis for Aussie Broadband

The trick, as an investor, is to find companies that are going to perform well in the future, not just in the past. While crystal balls don’t exist, you can check our visualization of consensus analyst forecasts for Aussie Broadband’s future EPS 100% free.

It’s pleasing to see company leaders with putting their money on the line, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. Shareholders will be pleased by the fact that insiders own Aussie Broadband shares worth a considerable sum. Indeed, they have a considerable amount of wealth invested in it, currently valued at AU$160m. Investors will appreciate management having this amount of skin in the game as it shows their commitment to the company’s future.

It’s good to see that insiders are invested in the company, but are remuneration levels reasonable? Our quick analysis into CEO remuneration would seem to indicate they are. For companies with market capitalisations between AU$616m and AU$2.5b, like Aussie Broadband, the median CEO pay is around AU$1.5m.

The Aussie Broadband CEO received AU$1.2m in compensation for the year ending June 2025. That seems pretty reasonable, especially given it’s below the median for similar 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. It can also be a sign of good governance, more generally.

As previously touched on, Aussie Broadband is a growing business, which is encouraging. Earnings growth might be the main attraction for Aussie Broadband, but the fun does not stop there. Boasting both modest CEO pay and considerable insider ownership, you’d argue this one is worthy of the watchlist, at least. Don’t forget that there may still be risks. For instance, we’ve identified 1 warning sign for Aussie Broadband that you should be aware of.

While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in AU with promising growth potential and insider confidence.

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.

Investors who take an interest in AMA Group Limited (ASX:AMA) should definitely note that the Independent Non-Executive Chairman, Brian Austin, recently paid AU$0.99 per share to buy AU$197k worth of the stock. Although the purchase only increased their holding by 2.6%, it is still a solid purchase in our view.

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In fact, the recent purchase by Independent Non-Executive Chairman Brian Austin was not their only acquisition of AMA Group shares this year. Earlier in the year, they paid AU$1.00 per share in a AU$499k purchase. That means that an insider was happy to buy shares at above the current price of AU$0.93. Their view may have changed since then, but at least it shows they felt optimistic at the time. In our view, the price an insider pays for shares is very important. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.

In the last twelve months AMA Group insiders were buying shares, but not selling. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!

View our latest analysis for AMA Group

There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of undervalued small cap companies that insiders are buying.

Many investors like to check how much of a company is owned by insiders. Usually, the higher the insider ownership, the more likely it is that insiders will be incentivised to build the company for the long term. It appears that AMA Group insiders own 8.9% of the company, worth about AU$40m. While this is a strong but not outstanding level of insider ownership, it’s enough to indicate some alignment between management and smaller shareholders.

It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. However, we note that the company didn’t make a profit over the last twelve months, which makes us cautious. Insiders likely see value in AMA Group shares, given these transactions (along with notable insider ownership of the company). Therefore, you should definitely take a look at this FREE report showing analyst forecasts for AMA Group.

If you would prefer to check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, that have HIGH return on equity and low debt.

For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions of direct interests only, but not derivative transactions or indirect interests.

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.