Some have more money than sense, they say, so even companies with no revenue, no profit and a history of failures can easily find investors. But as Peter Lynch said in One Up on Wall Street“Long shots almost never pay off.”
So if you’re like me, you might be more interested in profitable and growing companies, like Liontrust Asset Management (LON:LIO). While that doesn’t make stocks worth buying at any price, you can’t deny that successful capitalism ultimately requires profits. In comparison, loss-making companies act like a sponge for capital – but unlike such a sponge, they don’t always produce something when pressed.
See our latest analysis for Liontrust Asset Management
How fast does Liontrust Asset Management grow earnings per share?
The market is a short-term voting machine, but a long-term weighing machine, so stock price eventually follows earnings per share (EPS). This means EPS growth is seen as a real benefit by most successful long-term investors. For my part, I am blown away by the fact that Liontrust Asset Management has increased EPS by 47% annually over the past three years. This kind of growth never lasts long, but like a shooting star, it’s worth watching when it happens.
One way to check a company’s growth is to look at the evolution of its revenues and its earnings before interest and taxes (EBIT) margins. Liontrust Asset Management shareholders can take comfort in the fact that EBIT margins have increased from 20% to 34% and revenues are increasing. It’s great to see, on both counts.
The chart below shows how the company’s top and bottom line has grown over time. To see the actual numbers, click on the chart.
As we live in the moment at all times, there is no doubt in my mind that the future matters more than the past. So why not check out this interactive chart outlining future EPS estimates, for Liontrust Asset Management?
Are Liontrust Asset Management insiders aligned with all shareholders?
Like standing on the lookout, surveying the horizon at sunrise, insider buying, for some investors, brings joy. This view is based on the possibility that stock purchases signal an uptrend on behalf of the buyer. However, small purchases don’t always reveal conviction, and insiders don’t always get it right.
Insiders have both bought and sold shares of Liontrust Asset Management over the past year, but the good news is that they have spent £29,000 more on net buying than selling. When you weigh that, it’s a slight positive, indicating increased alignment between shareholders and management. We also note that it was CEO and Executive Director John Ions who made the biggest acquisition, paying £612,000 for shares at around £12.31 each.
In addition to insider buying, it’s good to see that Liontrust Asset Management insiders have a valuable investment in the company. Indeed, they hold £18million worth of his stock. That’s a lot of money, and no small incentive to work hard. Although it represents only 2.8% of the company, the value of this investment is enough to show that insiders have a lot to do with the company.
Is Liontrust Asset Management Worth Watching?
Liontrust Asset Management’s profits took off like any random cryptocurrency in 2017. Additionally, insiders have a large stake in the company and have bought more shares. Due to the possibility that it has reached an inflection point, I would say that Liontrust Asset Management belongs to the High from your watch list. You should always take note of the risks, for example – Liontrust Asset Management has 3 warning signs we think you should know.
There are many other companies whose insiders buy shares. So if you like the sound of Liontrust Asset Management, you’ll probably love this free list of growing companies insiders are buying.
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.