Here's Why We Think Hamilton Beach Brands Holding (NYSE:HBB) Might Deserve Your Attention Today
It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.
If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Hamilton Beach Brands Holding (NYSE:HBB). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.
Check out our latest analysis for Hamilton Beach Brands Holding
Hamilton Beach Brands Holding's Earnings Per Share Are Growing
If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Shareholders will be happy to know that Hamilton Beach Brands Holding's EPS has grown 19% each year, compound, over three years. If growth like this continues on into the future, then shareholders will have plenty to smile about.
It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. While Hamilton Beach Brands Holding may have maintained EBIT margins over the last year, revenue has fallen. While this may raise concerns, investors should investigate the reasoning behind this.
You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.
Since Hamilton Beach Brands Holding is no giant, with a market capitalisation of US$197m, you should definitely check its cash and debt before getting too excited about its prospects.
Are Hamilton Beach Brands Holding Insiders Aligned With All Shareholders?
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.
Any way you look at it Hamilton Beach Brands Holding shareholders can gain quiet confidence from the fact that insiders shelled out US$291k to buy stock, over the last year. This, combined with the lack of sales from insiders, should be a great signal for shareholders in what's to come. It is also worth noting that it was Independent Director Paul Furlow who made the biggest single purchase, worth US$191k, paying US$11.25 per share.
Along with the insider buying, another encouraging sign for Hamilton Beach Brands Holding is that insiders, as a group, have a considerable shareholding. Given insiders own a significant chunk of shares, currently valued at US$65m, they have plenty of motivation to push the business to succeed. At 33% of the company, the co-investment by insiders fosters confidence that management will make long-term focussed decisions.
Is Hamilton Beach Brands Holding Worth Keeping An Eye On?
For growth investors, Hamilton Beach Brands Holding's raw rate of earnings growth is a beacon in the night. On top of that, insiders own a significant stake in the company and have been buying more shares. So it's fair to say that this stock may well deserve a spot on your watchlist. Before you take the next step you should know about the 3 warning signs for Hamilton Beach Brands Holding (2 make us uncomfortable!) that we have uncovered.
There are plenty of other companies that have insiders buying up shares. So if you like the sound of Hamilton Beach Brands Holding, you'll probably love this free list of growing companies that insiders are buying.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
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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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