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.
NYSE:WTS Earnings and Revenue History December 29th 2023
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.
你開車時不要注視後視鏡,因此你可能會對這份免費報告更感興趣,該報告顯示了分析師對Watts Water Technologies未來利潤的預測。
瓦茨水務科技內部人士是否與所有股東保持一致?
我們預計不會看到內部人士擁有像Watts Water Technologies這樣的70億美元公司的很大一部分股份。但是,他們是公司的投資者,這確實令我們感到欣慰。我們注意到,他們在該公司的可觀股份價值13億美元。這總計佔該公司股份的19%。足以引導管理層的決策過程走上爲股東帶來最大利益的道路。對投資者來說看起來非常樂觀。
Watts Water Technologies值得在您的關注清單上佔有一席
如果你認爲股價緊隨每股收益,那麼你肯定應該進一步研究瓦茨水務科技強勁的每股收益增長。此外,高水平的內部所有權令人印象深刻,這表明管理層對每股收益的增長表示讚賞,並對Watts Water Technologies的持續實力充滿信心。增長和內部信心備受關注,因此值得進一步調查,以辨別該股的真實價值。確定自己喜歡的企業後,下一步就是考慮你認爲它的價值。現在,您有機會查看我們對瓦茨水務科技的獨家折扣現金流估值。今天看一眼可能會讓你受益。
儘管Watts Water Technologies看起來確實不錯,但如果內部人士買入股票,它可能會吸引更多的投資者。如果你想看看有內幕買入的公司,那就看看這些精心挑選的公司,這些公司不僅增長強勁,而且最近也出現了內幕買盤。
請注意,本文中討論的內幕交易是指相關司法管轄區內應報告的交易。
對這篇文章有反饋嗎?對內容感到擔憂?直接聯繫我們。 或者,給編輯團隊 (at) simplywallst.com 發送電子郵件。 Simply Wall St 的這篇文章本質上是籠統的。我們僅使用公正的方法提供基於歷史數據和分析師預測的評論,我們的文章並非旨在提供財務建議。它不構成買入或賣出任何股票的建議,也沒有考慮到您的目標或財務狀況。我們的目標是爲您提供由基本數據驅動的長期重點分析。請注意,我們的分析可能不會考慮最新的價格敏感型公司公告或定性材料。華爾街只是沒有持有上述任何股票的頭寸。