Yahoo Finance We Ran A Stock Scan For Earnings Growth And Koninklijke Ahold Delhaize (AMS:AD) Passed With Ease
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. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. 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 Koninklijke Ahold Delhaize (AMS:AD). 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.
View our latest analysis for Koninklijke Ahold Delhaize
How Fast Is Koninklijke Ahold Delhaize Growing?
Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. That makes EPS growth an attractive quality for any company. Over the last three years, Koninklijke Ahold Delhaize has grown EPS by 13% per year. That growth rate is fairly good, assuming the company can keep it up.
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. While we note Koninklijke Ahold Delhaize achieved similar EBIT margins to last year, revenue grew by a solid 15% to €89b. That's a real positive.
You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.
Fortunately, we've got access to analyst forecasts of Koninklijke Ahold Delhaize's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.
Are Koninklijke Ahold Delhaize 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. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.
Although we did see some insider selling (worth €7.3m) this was overshadowed by a mountain of buying, totalling €9.7m in just one year. This adds to the interest in Koninklijke Ahold Delhaize because it suggests that those who understand the company best, are optimistic. We also note that it was the President, Frans W. Muller, who made the biggest single acquisition, paying €4.8m for shares at about €31.55 each.
Along with the insider buying, another encouraging sign for Koninklijke Ahold Delhaize is that insiders, as a group, have a considerable shareholding. As a matter of fact, their holding is valued at €27m. That's a lot of money, and no small incentive to work hard. Despite being just 0.09% 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. In addition, insiders have been busy adding to their sizeable holdings in the company. That makes the company a prime candidate for your watchlist - and arguably a research priority. However, before you get too excited we've discovered 1 warning sign for Koninklijke Ahold Delhaize that 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
