With EPS Growth And More, Virgin Money UK (LON:VMUK) Makes An Interesting Case – Yahoo Finance UK

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. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.
So if this idea of high risk and high reward doesn’t suit, you might be more interested in profitable, growing companies, like Virgin Money UK (LON:VMUK). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Virgin Money UK with the means to add long-term value to shareholders.
View our latest analysis for Virgin Money UK
Virgin Money UK has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn’t be a fair assessment of the company’s future. So it would be better to isolate the growth rate over the last year for our analysis. Virgin Money UK boosted its trailing twelve month EPS from UK£0.27 to UK£0.34, in the last year. This amounts to a 24% gain; a figure that shareholders will be pleased to see. We should also note that the company has boosted EPS by buying back shares, showing the strength of its balance sheet.
One way to double-check a company’s growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. Not all of Virgin Money UK’s revenue this year is revenue from operations, so keep in mind the revenue and margin numbers used in this article might not be the best representation of the underlying business. While we note Virgin Money UK achieved similar EBIT margins to last year, revenue grew by a solid 2.7% to UK£1.7b. That’s encouraging news for the company!
In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.
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 Virgin Money UK.
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. Of course, we can never be sure what insiders are thinking, we can only judge their actions.
Virgin Money UK top brass are certainly in sync, not having sold any shares, over the last year. But the real excitement comes from the UK£97k that CFO & Executive Director Clifford Abrahams spent buying shares (at an average price of about UK£1.62). Strong buying like that could be a sign of opportunity.
One positive for Virgin Money UK is that it is growing EPS. That’s nice to see. While some companies are struggling to grow EPS, Virgin Money UK seems free from that morose affliction. The icing on the cake is that an insider bought shares during the year; a point of interest for people who will want to keep a watchful eye on this stock. What about risks? Every company has them, and we’ve spotted 3 warning signs for Virgin Money UK (of which 1 is a bit concerning!) you should know about.
The good news is that Virgin Money UK 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.
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.
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