U.S. Markets open in 6 hrs 49 mins
  • S&P Futures

    3,915.75
    -7.00 (-0.18%)
     
  • Dow Futures

    31,399.00
    -41.00 (-0.13%)
     
  • Nasdaq Futures

    11,894.00
    -41.50 (-0.35%)
     
  • Russell 2000 Futures

    1,772.90
    +0.10 (+0.01%)
     
  • Crude Oil

    110.20
    +0.61 (+0.56%)
     
  • Gold

    1,811.40
    -4.50 (-0.25%)
     
  • Silver

    21.36
    -0.18 (-0.83%)
     
  • EUR/USD

    1.0485
    +0.0020 (+0.1887%)
     
  • 10-Yr Bond

    2.8860
    0.0000 (0.00%)
     
  • Vix

    30.96
    +4.86 (+18.62%)
     
  • GBP/USD

    1.2357
    +0.0015 (+0.1236%)
     
  • USD/JPY

    128.6570
    +0.3600 (+0.2806%)
     
  • BTC-USD

    29,215.48
    -709.30 (-2.37%)
     
  • CMC Crypto 200

    651.37
    -19.31 (-2.88%)
     
  • FTSE 100

    7,438.09
    -80.26 (-1.07%)
     
  • Nikkei 225

    26,402.84
    -508.36 (-1.89%)
     

Here's Why We Think Columbia Financial (NASDAQ:CLBK) Is Well Worth Watching

  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.

So if you're like me, you might be more interested in profitable, growing companies, like Columbia Financial (NASDAQ:CLBK). While profit is not necessarily a social good, it's easy to admire a business that can consistently produce it. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.

Check out our latest analysis for Columbia Financial

How Fast Is Columbia Financial Growing Its Earnings Per Share?

In the last three years Columbia Financial's earnings per share took off like a rocket; fast, and from a low base. So the actual rate of growth doesn't tell us much. Thus, it makes sense to focus on more recent growth rates, instead. Like the last firework on New Year's Eve accelerating into the sky, Columbia Financial's EPS shot from US$0.45 to US$0.78, over the last year. You don't see 72% year-on-year growth like that, very often. The best case scenario? That the business has hit a true inflection point.

I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. I note that Columbia Financial's revenue from operations was lower than its revenue in the last twelve months, so that could distort my analysis of its margins. Columbia Financial maintained stable EBIT margins over the last year, all while growing revenue 29% to US$271m. That's a real positive.

In the chart below, you can see how the company has grown earnings, and revenue, over time. For finer detail, click on the image.

earnings-and-revenue-history
earnings-and-revenue-history

Fortunately, we've got access to analyst forecasts of Columbia Financial's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are Columbia Financial Insiders Aligned With All Shareholders?

I like company leaders to have some skin in the game, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. So it is good to see that Columbia Financial insiders have a significant amount of capital invested in the stock. Indeed, they hold US$35m worth of its stock. That shows significant buy-in, and may indicate conviction in the business strategy. Even though that's only about 1.7% of the company, it's enough money to indicate alignment between the leaders of the business and ordinary shareholders.

Is Columbia Financial Worth Keeping An Eye On?

Columbia Financial's earnings have taken off like any random crypto-currency did, back in 2017. That sort of growth is nothing short of eye-catching, and the large investment held by insiders certainly brightens my view of the company. The hope is, of course, that the strong growth marks a fundamental improvement in the business economics. So yes, on this short analysis I do think it's worth considering Columbia Financial for a spot on your watchlist. However, before you get too excited we've discovered 1 warning sign for Columbia Financial that you should be aware of.

Although Columbia Financial certainly looks good to me, I would like it more if insiders were buying up shares. If you like to see insider buying, too, then this free list of growing companies that insiders are buying, could be exactly what you're looking for.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.