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.
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
Protesters gathered in the west German village of Luetzerath on Sunday to challenge the extension of an open-air coal mine they say runs counter to the country's climate commitments.
The offer also includes a commitment to no compulsory redundancies until at least March 31 2024.
The party has also proposed the right to work fewer hours and the right to work at times that vary from week to week.
Dr James Fox explains why he'll continue buying Lloyds shares in 2023 with interest rates likely to rise further as the year progresses. The post Why interest rate sensitivity makes Lloyds shares a buy for 2023 appeared first on The Motley Fool UK.
This week the chancellor performs his latest Scrooge act with a revamp of the energy bill relief scheme – and the signs aren’t good
The FTSE 100 has closed up 66 points to 7,699, hitting a 3-year high as it edges closer towards the all-time high of 7,900. Gas prices fell 20% in the final week of December, according to new data released by the Office for National Statistics this morning, amid unusually mild temperatures at the start of the new year. Meanwhile, mortgage lender Halifax today revealed the average UK house price dropped 1.5% in December.
Dr James Fox investigates how he could build an index-beating portfolio by pursuing a value investing strategy like that of the 'Oracle of Omaha'. The post Stocks and Shares ISA: how to build a portfolio like Warren Buffett appeared first on The Motley Fool UK.
LONDON (Reuters) -British Prime Minister Rishi Sunak said on Sunday he was willing to discuss pay rises for nurses ahead of a meeting with public sector trade union leaders in an effort to end the biggest wave of industrial disputes in decades. Britain's National Health Service, long treasured and funded by taxpayers, delivers free care to all, but is under strain following years of relative underinvestment and the fallout from the COVID-19 pandemic. The strikes involving nurses and ambulance workers, staff shortages, and winter flu have led some hospitals to declare critical incidents.
The chief executive of Channel 4 has denied it is a Left-wing version of GB News and defended its often-critical coverage of the Government after winning a battle against privatisation. Alex Mahon said the station did not give too much credence to Left-wing voices, adding that there were a “wide range of views in the newsroom”.
Don't be fooled by FTSE 100's positive performance last year, says Roland Head. Most FTSE stocks suffered painful corrections, creating buying opportunities. The post Stock market correction: I’d start buying cheap FTSE 100 shares to build wealth appeared first on The Motley Fool UK.
Whether on pleasure yachts or deep-sea cargo ships, AI-backed navigation assistance and autonomy are helping captains set sail for sunsets or simply moor in a port scratch-free.
Our writer is already using this passive income plan to boost his earnings. He thinks 2023 could be a great year for him to continue the strategy. Here's why. The post 2023 could be a brilliant time to use this passive income plan! appeared first on The Motley Fool UK.
The consumer group found that people had saved significant sums when switching providers, but some had not attempted to haggle or switch.
Dr James Fox explains how he'd focus his investment strategy on discounted FTSE 100 stocks after a challenging year for many UK shares. The post Forget funds, I’m hunting for fallen FTSE 100 stocks to try and build wealth! appeared first on The Motley Fool UK.
Dr James Fox investigates whether he should snap up Tesla stock after it lost 68% of its value in a year. Star stock-picker Cathie Wood is buying. The post Tesla stock correction: should I follow Cathie Wood’s dip-buying spree? appeared first on The Motley Fool UK.
FTSE 100 shares are already making a comeback and it may soon be too late to capitalise on this rare buying opportunity. The post Don’t waste the stock market correction! I’d invest £5k in FTSE 100 shares today appeared first on The Motley Fool UK.
Dr James Fox explores whether Rolls-Royce shares could be his top stock pick for the coming year having been labelled woefully mispriced last summer. The post Could Rolls-Royce shares be the top pick for 2023? appeared first on The Motley Fool UK.
Rishi Sunak has no plan for economic growth and is allowing pessimism to hold back the recovery, the Bank of England’s former chief economist has said.
I think these dividend shares could be too good to miss following recent share price weakness. Here's why I think they could boost my passive income. The post Yields of 2.9% and 9.4%! 2 FTSE 250 dividend stocks I’d buy to boost my passive income appeared first on The Motley Fool UK.
Getting shot, standing in a downpour, being surrounded by bees: None are ideal, but for gamers, feeling the sensations of each is the goal.