Yahoo Finance Should You Be Adding IQVIA Holdings (NYSE:IQV) To Your Watchlist Today?
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 as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.
In contrast to all that, many investors prefer to focus on companies like IQVIA Holdings (NYSE:IQV), which has not only revenues, but also profits. 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 IQVIA Holdings
IQVIA Holdings' Improving Profits
In the last three years IQVIA Holdings' 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. Thus, it makes sense to focus on more recent growth rates, instead. Outstandingly, IQVIA Holdings' EPS shot from US$3.17 to US$6.22, over the last year. It's a rarity to see 96% year-on-year growth like that.
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. IQVIA Holdings shareholders can take confidence from the fact that EBIT margins are up from 9.0% to 12%, and revenue is growing. Both of which are great metrics to check off for potential growth.
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.
Fortunately, we've got access to analyst forecasts of IQVIA Holdings' future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.
Are IQVIA Holdings Insiders Aligned With All Shareholders?
Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. Because often, the purchase of stock is a sign that the buyer views it as undervalued. Of course, we can never be sure what insiders are thinking, we can only judge their actions.
The US$1.5m worth of shares that insiders sold during the last 12 months pales in comparison to the US$2.7m they spent on acquiring shares in the company. We find this encouraging because it suggests they are optimistic about IQVIA Holdings'future. It is also worth noting that it was Independent Director John Danhakl who made the biggest single purchase, worth US$2.7m, paying US$273 per share.
On top of the insider buying, it's good to see that IQVIA Holdings insiders have a valuable investment in the business. We note that their impressive stake in the company is worth US$329m. While that is a lot of skin in the game, we note this holding only totals to 0.8% of the business, which is a result of the company being so large. This still shows shareholders there is a degree of alignment between management and themselves.
Is IQVIA Holdings Worth Keeping An Eye On?
IQVIA Holdings' earnings have taken off in quite an impressive fashion. Just as heartening; insiders both own and are buying more stock. These factors seem to indicate the company's potential and that it has reached an inflection point. We'd suggest IQVIA Holdings belongs near the top of your watchlist. You should always think about risks though. Case in point, we've spotted 1 warning sign for IQVIA Holdings you should be aware of.
There are plenty of other companies that have insiders buying up shares. So if you like the sound of IQVIA Holdings, you'll probably love this free list of growing companies that insiders are 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.
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