Yahoo Finance Does Verisk Analytics (NASDAQ:VRSK) Deserve A Spot On Your Watchlist?
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 completely lacks a track record of revenue and profit. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.
If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in Verisk Analytics (NASDAQ:VRSK). Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.
View our latest analysis for Verisk Analytics
Verisk Analytics's Improving Profits
Even modest earnings per share growth (EPS) can create meaningful value, when it is sustained reliably from year to year. So it's no surprise that some investors are more inclined to invest in profitable businesses. Verisk Analytics has grown its trailing twelve month EPS from US$4.11 to US$4.35, in the last year. That amounts to a small improvement of 5.8%.
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. Verisk Analytics maintained stable EBIT margins over the last year, all while growing revenue 7.2% to US$2.9b. That's progress.
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.
Fortunately, we've got access to analyst forecasts of Verisk Analytics's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.
Are Verisk Analytics Insiders Aligned With All Shareholders?
We would not expect to see insiders owning a large percentage of a US$37b company like Verisk Analytics. But we are reassured by the fact they have invested in the company. Notably, they have an enormous stake in the company, worth US$310m. This suggests to me that leadership will be very mindful of shareholders' interests when making decisions!
Should You Add Verisk Analytics To Your Watchlist?
As I already mentioned, Verisk Analytics is a growing business, which is what I like to see. Just as polish makes silverware pop, the high level of insider ownership enhances my enthusiasm for this growth. The combination sparks joy for me, so I'd consider keeping the company on a watchlist. However, before you get too excited we've discovered 1 warning sign for Verisk Analytics that you should be aware of.
You can invest in any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies 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.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
