Some have more money than common sense, they say, so even businesses with no income, no profit, and a record of failure can easily find investors. But as Peter Lynch put it in One Up on Wall Street, ‘Long shots hardly ever pay off.’
So if you’re like me, you might be more interested in profitable and growing businesses like Intertape Polymer Group (TSE: ITP). Even if stocks are fully valued today, most capitalists would recognize its benefits as a demonstration of constant value generation. In comparison, loss-making companies act like a sponge for capital – but unlike such a sponge, they don’t always produce something when in a hurry.
Check out our latest review for Intertape Polymer Group
Intertape Polymer Group earnings per share are growing.
The market is a short-term voting machine, but a long-term weighing machine, so the stock price eventually follows earnings per share (EPS). Therefore, there are a lot of investors who like to buy stocks in companies with growing EPS. Intertape Polymer Group has succeeded in increasing its EPS by 7.5% per year, over three years. While this type of growth rate is not surprising, it does show that the business is growing.
One way to check how a business is growing is to look at how its income and profit before interest and tax (EBIT) have changed. Although we note that Intertape Polymer Group EBIT margins were stable over the past year, revenues increased 10% to US $ 1.3 billion. It is progress.
You can take a look at the company’s revenue and profit growth trend, in the graph below. Click on the graph to see the exact numbers.
Fortunately, we have access to forecasts from Intertape Polymer Group analysts. future profits. You can make your own predictions without looking, or you can take a look at what the pros are predicting.
Are Intertape Polymer Group insiders aligned with all shareholders?
I like that business leaders have some skin in the game, so to speak, because it increases the alignment of incentives between the people who run the business and its real owners. As a result, I am encouraged that insiders own considerable value Intertape Polymer Group shares. To be precise, they have $ 52 million in stock. This shows strong buy-in and may indicate a belief in business strategy. Although he only represents 3.1% of the business, the value of this investment is enough to show that insiders have a lot going on in the business.
Does Intertape Polymer Group deserve a spot on your watchlist?
One of the positive points for Intertape Polymer Group is that it increases its EPS. It’s nice to see. If that’s not enough, there are also the fairly noticeable levels of insider ownership. I like this combination, for example. So yes, I think the stock is worth watching. It is also necessary to consider the ever-present specter of investment risk. We have identified 2 warning signs with Intertape Polymer Group, and understanding them should be part of your investment process.
Of course, you can (sometimes) buy stocks that are not growing income and do not have insiders who buy stocks. But as a growth investor, I always like to check out companies that do have these characteristics. You can access a free list of them here.
Please note that the insider trading discussed in this article refers to reportable trades in the relevant jurisdiction.
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This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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