Yahoo Finance Here's Why We Think Signify (AMS:LIGHT) Is Well Worth Watching
The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. 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. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.
So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Signify (AMS:LIGHT). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.
View our latest analysis for Signify
How Fast Is Signify Growing?
The market is a voting machine in the short term, but a weighing machine in the long term, so you'd expect share price to follow earnings per share (EPS) outcomes eventually. That makes EPS growth an attractive quality for any company. Impressively, Signify has grown EPS by 29% per year, compound, in the last three years. If growth like this continues on into the future, then shareholders will have plenty to smile about.
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. While we note Signify achieved similar EBIT margins to last year, revenue grew by a solid 12% to €7.5b. That's encouraging news for the company!
The chart below shows how the company's bottom and top lines have progressed over time. Click on the chart to see the exact numbers.
In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of Signify's forecast profits?
Are Signify 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. Because often, the purchase of stock is a sign that the buyer views it as undervalued. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.
First and foremost; there we saw no insiders sell Signify shares in the last year. Even better, though, is that the CFO & Member of Board of Management, Javier Van Engelen, bought a whopping €330k worth of shares, paying about €33.03 per share, on average. Purchases like this can offer an insight into the faith of the company's management - and it seems to be all positive.
Is Signify Worth Keeping An Eye On?
If you believe that share price follows earnings per share you should definitely be delving further into Signify's strong EPS growth. Not only is that growth rate rather juicy, but the insider buying adds fuel to the fire. To put it succinctly; Signify is a strong candidate for your watchlist. You should always think about risks though. Case in point, we've spotted 3 warning signs for Signify you should be aware of, and 2 of them shouldn't be ignored.
Keen growth investors love to see insider buying. Thankfully, Signify 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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