Some have more money than common sense, they say, so even companies with no income, no profit, and a record of failure can easily find investors. But the reality is that when a business loses money every year, for long enough, its investors will usually take their share of those losses.
So if you’re like me, you might be more interested in profitable and growing businesses like Wintrust Financial (NASDAQ: WTFC). While profit isn’t necessarily social good, it’s easy to admire a business that can consistently produce it. While a well-funded business can suffer losses for years, unless its owners have an endless appetite to subsidize the customer, it will eventually have to generate a profit, or else take its last breath.
Wintrust Financial’s earnings per share are growing.
If you think the markets are even vaguely efficient, then in the long run you would expect a company’s stock price to follow its earnings per share (EPS). So it’s no surprise that I like to invest in companies with growing EPS. Wintrust Financial has succeeded in increasing EPS by 10% per year, over three years. It’s a great rate, if the company can keep it up.
I like to look at earnings before interest and tax margins (EBIT), as well as revenue growth, to get another idea of how well the business is growing. Not all Wintrust Financial income this year is income operations, so keep in mind that the revenue and margin numbers I used might not be the best representation of the underlying business. Although we note that Wintrust Financial’s EBIT margins were stable over the past year, revenues increased 28% to reach US $ 1.8 billion. It’s really positive.
In the graph below, you can see how the business has increased its profit and revenue over time. For more details, click on the image.
NasdaqGS: WTFC Revenue and Revenue History as of December 31, 2021
Fortunately, we have access to the forecasts of the analysts of Wintrust Financial future profits. You can make your own predictions without looking, or you can take a look at what the pros are predicting.
Are Wintrust financial insiders aligned with all shareholders?
We wouldn’t expect to see insiders owning a significant percentage of a US $ 5.2 billion company like Wintrust Financial. But we are reassured by the fact that they are investors in the company. Since insiders own a small fortune of stocks, currently valued at $ 60 million, they have a lot of motivation to push the company to succeed. This should keep them focused on creating long-term shareholder value.
Is Wintrust Financial worth watching?
An important and encouraging feature of Wintrust Financial is that it increases its profits. Just as polishing shatters silverware, the high level of insider ownership bolsters my enthusiasm for this growth. The combination brings joy to me, so I would consider keeping the company on a watch list. And the risks? Every business has them, and we’ve spotted 1 warning sign for Wintrust Financial you should know.
Of course, you can (sometimes) buy stocks that are not growing income and not have insiders who buy 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 the insider trading discussed in this article refers to reportable trades in the relevant jurisdiction.
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