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. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.
If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in US Foods Holding (NYSE:USFD). 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.
See our latest analysis for US Foods Holding
US Foods Holding's Improving Profits
In the last three years US Foods Holding's earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. So it would be better to isolate the growth rate over the last year for our analysis. Impressively, US Foods Holding's EPS catapulted from US$0.91 to US$1.77, over the last year. Year on year growth of 94% is certainly a sight to behold.
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. EBIT margins for US Foods Holding remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 6.0% to US$35b. That's a real positive.
You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.
NYSE:USFD Earnings and Revenue History December 31st 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 US Foods Holding's future profits.
Are US Foods Holding Insiders Aligned With All Shareholders?
Since US Foods Holding has a market capitalisation of US$11b, we wouldn't expect insiders to hold a large percentage of shares. But thanks to their investment in the company, it's pleasing to see that there are still incentives to align their actions with the shareholders. Indeed, they hold US$35m worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. While their ownership only accounts for 0.3%, this is still a considerable amount at stake to encourage the business to maintain a strategy that will deliver value to shareholders.
Should You Add US Foods Holding To Your Watchlist?
US Foods Holding's earnings per share growth have been climbing higher at an appreciable rate. That sort of growth is nothing short of eye-catching, and the large investment held by insiders should certainly brighten the view of the company. The hope is, of course, that the strong growth marks a fundamental improvement in the business economics. So at the surface level, US Foods Holding is worth putting on your watchlist; after all, shareholders do well when the market underestimates fast growing companies. It's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with US Foods Holding , and understanding them should be part of your investment process.
There's always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that do have those features. You can access a tailored list of companies which have demonstrated growth backed by recent insider purchases.
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.
US Foods Holdingの時価総額がUS$11bであるため、内部関係者が大量の株式を保有することは期待できません。しかし、彼らの会社への投資により、株主との行動を調整するためのインセンティブがまだあるということはうれしい限りです。実際、彼らは株式の総額でUS$35mを保有しています。それは重要な買いインであり、ビジネス戦略に対する確信を示すことができます。彼らの所有割合はわずか0.3%にすぎませんが、株主に価値を提供する戦略を維持するために十分なため、この割合は相当なものです。
あなたのお気に入りにUS Foods Holdingを追加する必要がありますか?
US Foods Holdingの1株当たり利益の成長は、顕著な速度で上昇しています。そのような成長は、目を引くほどのものであり、内部関係者が保有する大きな投資は、確かに企業の見通しを明るくするでしょう。良いことを願っていますが、強力な成長はビジネスエコノミクスの基本的な改善を示すことを望んでいます。したがって、表面的には、US Foods Holdingはあなたのウォッチリストに加える価値があります。最も成長する企業が市場に過小評価されると、株主はうまくいくからです。投資リスクの常に存在することを考慮する必要があります。 US Foods Holdingの2つの警告サイン を特定しましたので、それらを理解することはあなたの投資プロセスの一部であるべきです。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。
オーストラリアでは、moomooの投資商品及びサービスはMoomoo Securities Australia Limitedによって提供され、オーストラリア証券投資委員会(ASIC)の管理を受けております(AFSL No. 224663)。「金融サービスガイド」、「利用規約」、「プライバシーポリシー」などの詳細は、Moomoo Securities Australia Limitedのウェブサイトhttps://www.moomoo.com/auでご確認いただけます。