Yahoo Finance Canaccord Genuity Group (TSE:CF) Ticks All The Boxes When It Comes To Earnings Growth
Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone 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 Canaccord Genuity Group (TSE:CF), which has not only revenues, but also profits. Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.
Check out our latest analysis for Canaccord Genuity Group
How Fast Is Canaccord Genuity Group Growing Its Earnings Per Share?
Canaccord Genuity Group has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. As a result, we'll zoom in on growth over the last year, instead. Canaccord Genuity Group boosted its trailing twelve month EPS from CA$2.30 to CA$2.71, in the last year. There's little doubt shareholders would be happy with that 18% gain. EPS has grown further thank to a share buyback. A great indicator of a healthy balance sheet.
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. Canaccord Genuity Group maintained stable EBIT margins over the last year, all while growing revenue 2.2% to CA$2.0b. That's encouraging news for the company!
In the chart below, you can see how the company has grown earnings and revenue, over time. Click on the chart to see the exact numbers.
Fortunately, we've got access to analyst forecasts of Canaccord Genuity Group's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.
Are Canaccord Genuity Group Insiders Aligned With All Shareholders?
Investors are always searching for a vote of confidence in the companies they hold and insider buying is one of the key indicators for optimism on the market. 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.
We do note that, in the last year, insiders sold CA$2.4m worth of shares. But that's far less than the CA$7.2m insiders spent purchasing stock. This adds to the interest in Canaccord Genuity Group because it suggests that those who understand the company best, are optimistic. We also note that it was the CEO, President & Director, Daniel Daviau, who made the biggest single acquisition, paying CA$1.8m for shares at about CA$9.00 each.
The good news, alongside the insider buying, for Canaccord Genuity Group bulls is that insiders (collectively) have a meaningful investment in the stock. Given insiders own a significant chunk of shares, currently valued at CA$110m, they have plenty of motivation to push the business to succeed. That holding amounts to 14% of the stock on issue, thus making insiders influential owners of the business and aligned with the interests of shareholders.
Is Canaccord Genuity Group Worth Keeping An Eye On?
One important encouraging feature of Canaccord Genuity Group is that it is growing profits. In addition, insiders have been busy adding to their sizeable holdings in the company. That should do plenty in prompting budding investors to undertake a bit more research - or even adding the company to their watchlists. We don't want to rain on the parade too much, but we did also find 2 warning signs for Canaccord Genuity Group that you need to be mindful of.
There are plenty of other companies that have insiders buying up shares. So if you like the sound of Canaccord Genuity Group, 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.
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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.
