Yahoo Finance With EPS Growth And More, Compagnie Financière Richemont (VTX:CFR) Makes An Interesting Case
It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. 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 are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.
So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Compagnie Financière Richemont (VTX:CFR). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Compagnie Financière Richemont with the means to add long-term value to shareholders.
View our latest analysis for Compagnie Financière Richemont
How Fast Is Compagnie Financière Richemont Growing Its Earnings Per Share?
Compagnie Financière Richemont has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. So it would be better to isolate the growth rate over the last year for our analysis. To the delight of shareholders, Compagnie Financière Richemont's EPS soared from €4.31 to €6.86, over the last year. That's a fantastic gain of 59%.
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. The good news is that Compagnie Financière Richemont is growing revenues, and EBIT margins improved by 2.9 percentage points to 25%, over the last year. Both of which are great metrics to check off for potential growth.
You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.
Fortunately, we've got access to analyst forecasts of Compagnie Financière Richemont's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.
Are Compagnie Financière Richemont Insiders Aligned With All Shareholders?
We would not expect to see insiders owning a large percentage of a CHF82b company like Compagnie Financière Richemont. But we are reassured by the fact they have invested in the company. Indeed, they have a considerable amount of wealth invested in it, currently valued at €7.5b. Investors will appreciate management having this amount of skin in the game as it shows their commitment to the company's future.
Is Compagnie Financière Richemont Worth Keeping An Eye On?
If you believe that share price follows earnings per share you should definitely be delving further into Compagnie Financière Richemont's strong EPS growth. With EPS growth rates like that, it's hardly surprising to see company higher-ups place confidence in the company through continuing to hold a significant investment. On the balance of its merits, solid EPS growth and company insiders who are aligned with the shareholders would indicate a business that is worthy of further research. You still need to take note of risks, for example - Compagnie Financière Richemont has 1 warning sign we think you should be aware of.
There's always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that do have those features. You can access a free list of them here.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
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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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