Yahoo Finance Is Now The Time To Put Peter Warren Automotive Holdings (ASX:PWR) On Your Watchlist?
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 as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' 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 Peter Warren Automotive Holdings (ASX:PWR). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Peter Warren Automotive Holdings with the means to add long-term value to shareholders.
Check out our latest analysis for Peter Warren Automotive Holdings
How Fast Is Peter Warren Automotive Holdings Growing?
If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. Shareholders will be happy to know that Peter Warren Automotive Holdings' EPS has grown 32% each year, compound, over three years. If the company can sustain that sort of growth, we'd expect shareholders to come away satisfied.
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. Peter Warren Automotive Holdings maintained stable EBIT margins over the last year, all while growing revenue 17% to AU$1.9b. That's progress.
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.
You don't drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for Peter Warren Automotive Holdings' future profits.
Are Peter Warren Automotive Holdings Insiders Aligned With All Shareholders?
Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. Of course, we can never be sure what insiders are thinking, we can only judge their actions.
Belief in the company remains high for insiders as there hasn't been a single share sold by the management or company board members. But the real excitement comes from the AU$255k that Executive Director Paul Warren spent buying shares (at an average price of about AU$2.95). Purchases like this clue us in to the to the faith management has in the business' future.
And the insider buying isn't the only sign of alignment between shareholders and the board, since Peter Warren Automotive Holdings insiders own more than a third of the company. Actually, with 41% of the company to their names, insiders are profoundly invested in the business. Shareholders and speculators should be reassured by this kind of alignment, as it suggests the business will be run for the benefit of shareholders. In terms of absolute value, insiders have AU$188m invested in the business, at the current share price. So there's plenty there to keep them focused!
Should You Add Peter Warren Automotive Holdings To Your Watchlist?
You can't deny that Peter Warren Automotive Holdings 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. These things considered, this is one stock worth watching. What about risks? Every company has them, and we've spotted 3 warning signs for Peter Warren Automotive Holdings (of which 2 are concerning!) you should know about.
There are plenty of other companies that have insiders buying up shares. So if you like the sound of Peter Warren Automotive Holdings, 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.
