Yahoo Finance Here's Why I Think VGI Partners Global Investments (ASX:VG1) Is An Interesting Stock
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.'
So if you're like me, you might be more interested in profitable, growing companies, like VGI Partners Global Investments (ASX:VG1). While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. 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.
Check out our latest analysis for VGI Partners Global Investments
How Fast Is VGI Partners Global Investments Growing Its Earnings Per Share?
Even with very modest growth rates, a company will usually do well if it improves earnings per share (EPS) year after year. So it's no surprise that some investors are more inclined to invest in profitable businesses. Over twelve months, VGI Partners Global Investments increased its EPS from AU$0.11 to AU$0.11. That's a modest gain of 4.1%.
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. I note that VGI Partners Global Investments's revenue from operations was lower than its revenue in the last twelve months, so that could distort my analysis of its margins. VGI Partners Global Investments maintained stable EBIT margins over the last year, all while growing revenue 22% to AU$98m. That's progress.
The chart below shows how the company's bottom and top lines have progressed over time. Click on the chart to see the exact numbers.
While profitability drives the upside, prudent investors always check the balance sheet, too.
Are VGI Partners Global Investments Insiders Aligned With All Shareholders?
Like standing at the lookout, surveying the horizon at sunrise, insider buying, for some investors, sparks joy. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. Of course, we can never be sure what insiders are thinking, we can only judge their actions.
The good news is that VGI Partners Global Investments insiders spent a whopping AU$2.1m on stock in just one year, and I didn't see any selling. And so I find myself almost expectant, and certainly hopeful, that this large outlay signals prescient optimism for the business. We also note that it was the Non-Independent Director, Robert Luciano, who made the biggest single acquisition, paying AU$1.0m for shares at about AU$2.21 each.
On top of the insider buying, it's good to see that VGI Partners Global Investments insiders have a valuable investment in the business. Indeed, they hold AU$27m worth of its stock. That's a lot of money, and no small incentive to work hard. Despite being just 3.1% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.
Is VGI Partners Global Investments Worth Keeping An Eye On?
As I already mentioned, VGI Partners Global Investments is a growing business, which is what I like to see. Better yet, insiders are significant shareholders, and have been buying more shares. That makes the company a prime candidate for my watchlist - and arguably a research priority. You still need to take note of risks, for example - VGI Partners Global Investments has 2 warning signs (and 1 which is potentially serious) we think you should know about.
There are plenty of other companies that have insiders buying up shares. So if you like the sound of VGI Partners Global Investments, 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.
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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