Like a puppy chasing its tail, some new investors are often looking for “the next big thing,” even if that means buying “history stocks” with no revenue, let alone profit. Unfortunately, high-risk investments are often unlikely to ever return, and many investors pay a price to learn their lesson.
Contrary to all that, I prefer to spend time on companies like INFICON Holding (VTX:IFCN), which not only generates revenue, but also profits. Although profit is not necessarily a social good, it is easy to admire a company that can produce it consistently. Loss-making businesses are always in a race against time to achieve financial viability, but time is often the friend of a profitable business, especially if it is growing.
Check out our latest analysis for INFICON Holding
How fast does INFICON Holding grow earnings per share?
The market is a short-term voting machine, but a long-term weighing machine, so stock price eventually follows earnings per share (EPS). This makes EPS growth an attractive quality for any business. Over the past three years, INFICON Holding has increased EPS by 7.4% annually. Although this type of growth rate is not surprising, it shows that the company is growing.
I like to see revenue growth as an indication that growth is sustainable, and I look for a high margin on earnings before interest and taxes (EBIT) to point to a competitive moat (although some low-margin companies also have moats). The good news is that INFICON Holding is increasing its revenue and EBIT margins have improved by 3.9 percentage points to 19% compared to last year. It’s great to see, on both counts.
The chart below shows how the company’s top and bottom line has grown over time. For more details, click on the image.
You don’t drive with your eyes on the rearview mirror, so you might be more interested in that free report showing analyst forecasts for INFICON Holding future profits.
Are INFICON Holding insiders aligned with all shareholders?
I feel safer owning stock in a company if insiders also own stock, thereby aligning our interests more closely. Accordingly, I am encouraged that insiders hold INFICON Holding shares of considerable value. Indeed, they have invested a mountain of glittering wealth in it, currently valued at US$244 million. This suggests to me that management will be very mindful of shareholder interests when making decisions!
It means a lot to see insiders invested in the company, but I wonder if the compensation policies are shareholder-friendly. A brief analysis of CEO compensation suggests they are. I found that the median total compensation for CEOs of companies like INFICON Holding with a market capitalization between $1.0 billion and $3.2 billion is around $1.4 million.
The CEO of INFICON Holding received US$1.2 million in compensation for the year ending . This is below average for companies of a similar size and seems pretty reasonable to me. CEO compensation isn’t the most important aspect of a company to consider, but when it’s reasonable, it gives me a bit more confidence that executives are looking out for shareholders’ interests. I would also say that reasonable levels of compensation attest to good decision-making more generally.
Should you add INFICON Holding to your watchlist?
As I mentioned before, INFICON Holding is a growing company, which I like to see. Profit growth may be INFICON Holding’s primary focus, but so is the fun. do not stop there. Boasting both a modest CEO salary and considerable insider ownership, I’d say this one deserves at least the watch list. However, you should always think about the risks. Concrete example, we spotted 1 warning sign for INFICON Holding you should be aware.
Of course, you can (sometimes) buy stocks that are not increased income and do not have insiders buying stocks. But as a growth investor, I always like to check out companies that To do have these characteristics. You can access a free list of them here.
Please note that insider trading discussed in this article refers to reportable trading in the relevant jurisdiction.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.
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