Yahoo Finance Is Now The Time To Put Currency Exchange International (TSE:CXI) On Your Watchlist?
The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.
Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Currency Exchange International (TSE:CXI). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Currency Exchange International with the means to add long-term value to shareholders.
View our latest analysis for Currency Exchange International
How Quickly Is Currency Exchange International Increasing Earnings Per Share?
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) outcomes. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. Recognition must be given to the that Currency Exchange International has grown EPS by 54% per year, over the last three years. While that sort of growth rate isn't sustainable for long, it certainly catches the eye of prospective investors.
Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. The good news is that Currency Exchange International is growing revenues, and EBIT margins improved by 16.6 percentage points to 25%, over the last year. Ticking those two boxes is a good sign of growth, in our book.
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.
Currency Exchange International isn't a huge company, given its market capitalisation of CA$154m. That makes it extra important to check on its balance sheet strength.
Are Currency Exchange International Insiders Aligned With All Shareholders?
It's said that there's no smoke without fire. For investors, insider buying is often the smoke that indicates which stocks could set the market alight. Because often, the purchase of stock is a sign that the buyer views it as undervalued. However, small purchases are not always indicative of conviction, and insiders don't always get it right.
We note that Currency Exchange International insiders spent US$142k on stock, over the last year; in contrast, we didn't see any selling. That paints the company in a nice light, as it signals that its leaders are feeling confident in where the company is heading. It is also worth noting that it was Director Mark Mickleborough who made the biggest single purchase, worth CA$34k, paying CA$16.99 per share.
The good news, alongside the insider buying, for Currency Exchange International bulls is that insiders (collectively) have a meaningful investment in the stock. To be specific, they have US$40m worth of shares. That's a lot of money, and no small incentive to work hard. Those holdings account for over 26% of the company; visible skin in the game.
Should You Add Currency Exchange International To Your Watchlist?
Currency Exchange International's earnings per share growth have been climbing higher at an appreciable rate. What's more, insiders own a significant stake in the company and have been buying more shares. This quick rundown suggests that the business may be of good quality, and also at an inflection point, so maybe Currency Exchange International deserves timely attention. While we've looked at the quality of the earnings, we haven't yet done any work to value the stock. So if you like to buy cheap, you may want to check if Currency Exchange International is trading on a high P/E or a low P/E, relative to its industry.
The good news is that Currency Exchange International is not the only growth stock with insider buying. Here's a list of them... 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.
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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.
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