Yahoo Finance Here's Why I Think Liontrust Asset Management (LON:LIO) Is An Interesting Stock
Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, 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, growing companies, like Liontrust Asset Management ( LON:LIO ). While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. In comparison, loss making companies act like a sponge for capital - but unlike such a sponge they do not always produce something when squeezed.
See our latest analysis for Liontrust Asset Management
How Quickly Is Liontrust Asset Management Increasing Earnings Per Share?
The market is a voting machine in the short term, but a weighing machine in the long term, so share price follows earnings per share (EPS) eventually. That means EPS growth is considered a real positive by most successful long-term investors. I, for one, am blown away by the fact that Liontrust Asset Management has grown EPS by 47% per year, over the last three years. That sort of growth never lasts long, but like a shooting star it is well worth watching when it happens.
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. Liontrust Asset Management shareholders can take confidence from the fact that EBIT margins are up from 20% to 34%, and revenue is growing. That's great to see, on both counts.
The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.
While we live in the present moment at all times, there's no doubt in my mind that the future matters more than the past. So why not check this interactive chart depicting future EPS estimates, for Liontrust Asset Management ?
Are Liontrust Asset Management Insiders Aligned With All Shareholders?
Like standing at the lookout, surveying the horizon at sunrise, insider buying, for some investors, sparks joy. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, small purchases are not always indicative of conviction, and insiders don't always get it right.
Insiders both bought and sold Liontrust Asset Management shares in the last year, but the good news is they spent UK£29k more buying than they netted selling. When you weigh that up, it is a mild positive, indicating increased alignment between shareholders and management.
On top of the insider buying, it's good to see that Liontrust Asset Management insiders have a valuable investment in the business. Indeed, they hold UK£18m worth of its stock. That's a lot of money, and no small incentive to work hard. Despite being just 2.8% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.
Is Liontrust Asset Management Worth Keeping An Eye On?
Liontrust Asset Management's earnings have taken off like any random crypto-currency did, back in 2017. What's more insiders own a significant stake in the company and have been buying more shares. Because of the potential that it has reached an inflection point, I'd suggest Liontrust Asset Management belongs on the top of your watchlist. You still need to take note of risks, for example - Liontrust Asset Management has 3 warning signs we think you should be aware of.
There are plenty of other companies that have insiders buying up shares. So if you like the sound of Liontrust Asset Management, you'll probably love this free list of growing companies that insiders are buying.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
