For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. 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 Watts Water Technologies (NYSE:WTS). While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.
Check out our latest analysis for Watts Water Technologies
How Quickly Is Watts Water Technologies Increasing Earnings Per Share?
Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. Impressively, Watts Water Technologies has grown EPS by 34% per year, compound, in the last 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. While we note Watts Water Technologies achieved similar EBIT margins to last year, revenue grew by a solid 3.1% to US$2.0b. That's progress.
In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.
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 Watts Water Technologies' future profits.
Are Watts Water Technologies Insiders Aligned With All Shareholders?
We would not expect to see insiders owning a large percentage of a US$7.0b company like Watts Water Technologies. But we do take comfort from the fact that they are investors in the company. We note that their impressive stake in the company is worth US$1.3b. This totals to 19% of shares in the company. Enough to lead management's decision making process down a path that brings the most benefit to shareholders. Looking very optimistic for investors.
Does Watts Water Technologies Deserve A Spot On Your Watchlist?
If you believe that share price follows earnings per share you should definitely be delving further into Watts Water Technologies' strong EPS growth. Further, the high level of insider ownership is impressive and suggests that the management appreciates the EPS growth and has faith in Watts Water Technologies' continuing strength. The growth and insider confidence is looked upon well and so it's worthwhile to investigate further with a view to discern the stock's true value. Once you've identified a business you like, the next step is to consider what you think it's worth. And right now is your chance to view our exclusive discounted cashflow valuation of Watts Water Technologies. You might benefit from giving it a glance today.
Although Watts Water Technologies certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with insider buying, then check out this handpicked selection of companies that not only boast of strong growth but have also seen recent insider 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.
你开车时不要注视后视镜,因此你可能会对这份免费报告更感兴趣,该报告显示了分析师对Watts Water Technologies未来利润的预测。
瓦茨水务科技内部人士是否与所有股东保持一致?
我们预计不会看到内部人士拥有像Watts Water Technologies这样的70亿美元公司的很大一部分股份。但是,他们是公司的投资者,这确实令我们感到欣慰。我们注意到,他们在该公司的可观股份价值13亿美元。这总计占该公司股份的19%。足以引导管理层的决策过程走上为股东带来最大利益的道路。对投资者来说看起来非常乐观。
Watts Water Technologies值得在您的关注清单上占有一席
如果你认为股价紧随每股收益,那么你肯定应该进一步研究瓦茨水务科技强劲的每股收益增长。此外,高水平的内部所有权令人印象深刻,这表明管理层对每股收益的增长表示赞赏,并对Watts Water Technologies的持续实力充满信心。增长和内部信心备受关注,因此值得进一步调查,以辨别该股的真实价值。确定自己喜欢的企业后,下一步就是考虑你认为它的价值。现在,您有机会查看我们对瓦茨水务科技的独家折扣现金流估值。今天看一眼可能会让你受益。
尽管Watts Water Technologies看起来确实不错,但如果内部人士买入股票,它可能会吸引更多的投资者。如果你想看看有内幕买入的公司,那就看看这些精心挑选的公司,这些公司不仅增长强劲,而且最近也出现了内幕买盘。
请注意,本文中讨论的内幕交易是指相关司法管辖区内应报告的交易。
对这篇文章有反馈吗?对内容感到担忧?直接联系我们。 或者,给编辑团队 (at) simplywallst.com 发送电子邮件。 Simply Wall St 的这篇文章本质上是笼统的。我们仅使用公正的方法提供基于历史数据和分析师预测的评论,我们的文章并非旨在提供财务建议。它不构成买入或卖出任何股票的建议,也没有考虑到您的目标或财务状况。我们的目标是为您提供由基本数据驱动的长期重点分析。请注意,我们的分析可能不会考虑最新的价格敏感型公司公告或定性材料。华尔街只是没有持有上述任何股票的头寸。