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.And in their study titled Who Falls Prey to the Wolf of Wall Street?’ Leuz et.al.found that it is ‘quite common’ for investors to lose money by buying into ‘pump and dump’ schemes.” data-reactid=”18″>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.And in their study titled Who Falls Prey to the Wolf of Wall Street?’ Leuz et.al.
found that it is ‘quite common’ for investors to lose money by buying into ‘pump and dump’ schemes.If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in Ascential ( LON:ASCL ).
Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation.While a well funded company may sustain losses for years, unless its owners have an endless appetite for subsidizing the customer, it will need to generate a profit eventually, or else breathe its last breath.View our latest analysis for Ascential Ascential’s Improving Profits Over the last three years, Ascential has grown earnings per share (EPS) like young bamboo after rain; fast, and from a low base.So I don’t think the percent growth rate is particularly meaningful.
Thus, it makes sense to focus on more recent growth rates, instead.Like a firecracker arcing through the night sky, Ascential’s EPS shot from UK£0.025 to UK£0.063, over the last year.Year on year growth of 154% is certainly a sight to behold.I like to see top-line growth as an indication that growth is sustainable, and I look for a high earnings before interest and taxation (EBIT) margin to point to a competitive moat (though some companies with low margins also have moats).
On the one hand, Ascential’s EBIT margins fell over the last year, but on the other hand, revenue grew.So it seems the future my hold further growth, especially if EBIT margins can stabilize.In the chart below, you can see how the company has grown earnings, and revenue, over time.For finer detail, click on the image.More Of course the knack is to find stocks that have their best days in the future, not in the past.You could base your opinion on past performance, of course, but you may also want to check this interactive graph of professional analyst EPS forecasts for Ascential .Are Ascential Insiders Aligned With All Shareholders? It makes me feel more secure owning shares in a company if insiders also own shares, thusly more closely aligning our interests.So it is good to see that Ascential insiders have a significant amount of capital invested in the stock.
Indeed, they hold UK£16m worth of its stock.That’s a lot of money, and no small incentive to work hard.Despite being just 1.2% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.Should You Add Ascential To Your Watchlist? Ascential’s earnings have taken off like any random crypto-currency did, back in 2017.That sort of growth is nothing short of eye-catching, and the large investment held by insiders certainly brightens my view of the company.The hope is, of course, that the strong growth marks a fundamental improvement in the business economics.
So yes, on this short analysis I do think it’s worth considering Ascential for a spot on your watchlist.Of course, identifying quality businesses is only half the battle; investors need to know whether the stock is undervalued.So you might want to consider this free discounted cashflow valuation of Ascential.You can invest in any company you want.But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies with insider buying in the last three months.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction We aim to bring you long-term focused research analysis driven by fundamental data.Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.If you spot an error that warrants correction, please contact the editor at .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.
Simply Wall St has no position in the stocks mentioned.Thank you for reading..
