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For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. 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 Hyster-Yale (NYSE:HY). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.
See our latest analysis for Hyster-Yale
How Fast Is Hyster-Yale Growing Its Earnings Per Share?
In the last three years Hyster-Yale's earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. So it would be better to isolate the growth rate over the last year for our analysis. Hyster-Yale's EPS shot up from US$6.34 to US$8.99; a result that's bound to keep shareholders happy. That's a commendable gain of 42%.
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 we note Hyster-Yale achieved similar EBIT margins to last year, revenue grew by a solid 4.7% to US$4.3b. That's a real positive.
The chart below shows how the company's bottom and top lines have progressed over time. Click on the chart to see the exact numbers.
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 Hyster-Yale.
Are Hyster-Yale Insiders Aligned With All Shareholders?
It should give investors a sense of security owning shares in a company if insiders also own shares, creating a close alignment their interests. Shareholders will be pleased by the fact that insiders own Hyster-Yale shares worth a considerable sum. Indeed, they have a considerable amount of wealth invested in it, currently valued at US$190m. That equates to 20% of the company, making insiders powerful and aligned with other shareholders. Looking very optimistic for investors.