Yahoo Finance Should You Be Adding Chocoladefabriken Lindt & Sprüngli (VTX:LISN) To Your Watchlist Today?
Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone 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. 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 Chocoladefabriken Lindt & Sprüngli (VTX:LISN). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.
See our latest analysis for Chocoladefabriken Lindt & Sprüngli
How Quickly Is Chocoladefabriken Lindt & Sprüngli Increasing Earnings Per Share?
Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. That means EPS growth is considered a real positive by most successful long-term investors. Over the last three years, Chocoladefabriken Lindt & Sprüngli has grown EPS by 4.3% per year. This may not be setting the world alight, but it does show that EPS is on the upwards trend.
Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. While we note Chocoladefabriken Lindt & Sprüngli achieved similar EBIT margins to last year, revenue grew by a solid 8.4% to CHF5.0b. That's encouraging news for the company!
In the chart below, you can see how the company has grown earnings and revenue, over time. To see the actual numbers, click on the chart.
Of course the knack is to find stocks that have their best days in the future, not in the past. You could base your opinion on past performance, of course, but you may also want to check this interactive graph of professional analyst EPS forecasts for Chocoladefabriken Lindt & Sprüngli.
Are Chocoladefabriken Lindt & Sprüngli Insiders Aligned With All Shareholders?
We would not expect to see insiders owning a large percentage of a CHF24b company like Chocoladefabriken Lindt & Sprüngli. But we do take comfort from the fact that they are investors in the company. Notably, they have an enviable stake in the company, worth CHF682m. This suggests that leadership will be very mindful of shareholders' interests when making decisions!
Is Chocoladefabriken Lindt & Sprüngli Worth Keeping An Eye On?
As previously touched on, Chocoladefabriken Lindt & Sprüngli is a growing business, which is encouraging. If that's not enough on its own, there is also the rather notable levels of insider ownership. These two factors are a huge highlight for the company which should be a strong contender your watchlists. While we've looked at the quality of the earnings, we haven't yet done any work to value the stock. So if you like to buy cheap, you may want to check if Chocoladefabriken Lindt & Sprüngli is trading on a high P/E or a low P/E, relative to its industry.
Although Chocoladefabriken Lindt & Sprüngli certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see insider buying, then this free list of growing companies that insiders are buying, could be exactly what you're looking for.
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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