Yahoo Finance Here's Why We Think Christie Group (LON:CTG) Might Deserve Your Attention 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. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.
If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Christie Group (LON:CTG). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Christie Group with the means to add long-term value to shareholders.
View our latest analysis for Christie Group
Christie Group's Earnings Per Share Are Growing
If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. That makes EPS growth an attractive quality for any company. It certainly is nice to see that Christie Group has managed to grow EPS by 23% per year over three years. As a general rule, we'd say that if a company can keep up that sort of growth, shareholders will be beaming.
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. Christie Group shareholders can take confidence from the fact that EBIT margins are up from -4.7% to 7.6%, and revenue is growing. Ticking those two boxes is a good sign of growth, in our book.
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.
Christie Group isn't a huge company, given its market capitalisation of UK£27m. That makes it extra important to check on its balance sheet strength.
Are Christie Group Insiders Aligned With All Shareholders?
Investors are always searching for a vote of confidence in the companies they hold and insider buying is one of the key indicators for optimism on the market. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. Of course, we can never be sure what insiders are thinking, we can only judge their actions.
We haven't seen any insiders selling Christie Group shares, in the last year. With that in mind, it's heartening that David Rugg, the CEO & Chairman of the company, paid UK£32k for shares at around UK£1.14 each. Purchases like this can help the investors understand the views of the management team; in which case they see some potential in Christie Group.
And the insider buying isn't the only sign of alignment between shareholders and the board, since Christie Group insiders own more than a third of the company. In fact, they own 60% of the company, so they will share in the same delights and challenges experienced by the ordinary shareholders. Intuition will tell you this is a good sign because it suggests they will be incentivised to build value for shareholders over the long term. To give you an idea, the value of insiders' holdings in the business are valued at UK£16m at the current share price. That should be more than enough to keep them focussed on creating shareholder value!
Is Christie Group Worth Keeping An Eye On?
You can't deny that Christie Group has grown its earnings per share at a very impressive rate. That's attractive. On top of that, insiders own a significant piece of the pie when it comes to the company's stock, and one has been buying more. Astute investors will want to keep this stock on watch. You should always think about risks though. Case in point, we've spotted 2 warning signs for Christie Group you should be aware of.
Keen growth investors love to see insider buying. Thankfully, Christie Group isn't the only one. You can see a 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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