Do BHP Group’s (ASX:BHP) Earnings Warrant Your Attention?

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Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors.But as Peter Lynch said in One Up On Wall Street, ‘Long shots almost never pay off.'” data-reactid=”19″>Some have more dollars than sense, they say, so even companies that…

Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors.But as Peter Lynch said in One Up On Wall Street, ‘Long shots almost never pay off.'” data-reactid=”19″>Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors.But as Peter Lynch said in One Up On Wall Street , ‘Long shots almost never pay off.’ If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in BHP Group ( ASX:BHP ).Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation.Loss-making companies are always racing against time to reach financial sustainability, but time is often a friend of the profitable company, especially if it is growing.See our latest analysis for BHP Group How Fast Is BHP Group Growing? If you believe that markets are even vaguely efficient, then over the long term you’d expect a company’s share price to follow its earnings per share (EPS).

Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS.Who among us would not applaud BHP Group’s stratospheric annual EPS growth of 59%, compound, over the last three years? That sort of growth never lasts long, but like a shooting star it is well worth watching when it happens.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth.The good news is that BHP Group is growing revenues, and EBIT margins improved by 2.4 percentage points to 39%, over the last year.Ticking those two boxes is a good sign of growth, in my book.In the chart below, you can see how the company has grown earnings, and revenue, over time.For finer detail, click on the image.While we live in the present moment at all times, there’s no doubt in my mind that the future matters more than the past.

So why not check this interactive chart depicting future EPS estimates, for BHP Group ? Are BHP Group Insiders Aligned With All Shareholders? We would not expect to see insiders owning a large percentage of a AU$165b company like BHP Group.But we do take comfort from the fact that they are investors in the company.To be specific, they have US$48m worth of shares.That’s a lot of money, and no small incentive to work hard.Despite being just 0.03% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.Does BHP Group Deserve A Spot On Your Watchlist? BHP Group’s earnings have taken off like any random crypto-currency did, back in 2017.That EPS growth certainly has my attention, and the large insider ownership only serves to further stoke my interest.

At times fast EPS growth is a sign the business has reached an inflection point; and I do like those.So yes, on this short analysis I do think it’s worth considering BHP Group for a spot on your watchlist.Still, you should learn about the 4 warning signs we’ve spotted with BHP Group (including 1 which is a bit unpleasant) .

Although BHP Group certainly looks good to me, I would like it more if insiders were buying up shares.If you like to see insider buying, too, then this free list of growing companies that insiders are buying , could be exactly what you’re looking for.Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.Love or hate this article? Concerned about the content? Get in touch with us directly.Alternatively, email .This article by Simply Wall St is general in nature.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.Thank you for reading..

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