Yahoo Finance Is Now The Time To Put Koninklijke Ahold Delhaize (AMS:AD) 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. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. 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.
So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Koninklijke Ahold Delhaize (AMS:AD). 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.
View our latest analysis for Koninklijke Ahold Delhaize
Koninklijke Ahold Delhaize's Earnings Per Share Are Growing
The market is a voting machine in the short term, but a weighing machine in the long term, so you'd expect share price to follow earnings per share (EPS) outcomes eventually. That makes EPS growth an attractive quality for any company. We can see that in the last three years Koninklijke Ahold Delhaize grew its EPS by 16% per year. That's a good rate of growth, if it can be sustained.
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. EBIT margins for Koninklijke Ahold Delhaize remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 12% to €84b. That's encouraging news for the company!
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.
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 Koninklijke Ahold Delhaize.
Are Koninklijke Ahold Delhaize 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. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, small purchases are not always indicative of conviction, and insiders don't always get it right.
Despite €300k worth of sales, Koninklijke Ahold Delhaize insiders have overwhelmingly been buying the stock, spending €979k on purchases in the last twelve months. You could argue that level of buying implies genuine confidence in the business. We also note that it was the company insider, N. Knight, who made the biggest single acquisition, paying €952k for shares at about €28.35 each.
On top of the insider buying, it's good to see that Koninklijke Ahold Delhaize insiders have a valuable investment in the business. Indeed, they hold €22m worth of its stock. That's a lot of money, and no small incentive to work hard. Despite being just 0.08% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.
Should You Add Koninklijke Ahold Delhaize To Your Watchlist?
One positive for Koninklijke Ahold Delhaize is that it is growing EPS. That's nice to see. Better yet, insiders are significant shareholders, and have been buying more shares. That makes the company a prime candidate for your watchlist - and arguably a research priority. You should always think about risks though. Case in point, we've spotted 1 warning sign for Koninklijke Ahold Delhaize you should be aware of.
There are plenty of other companies that have insiders buying up shares. So if you like the sound of Koninklijke Ahold Delhaize, 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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
