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Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.
So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like PPHE Hotel Group (LON:PPH). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide PPHE Hotel Group with the means to add long-term value to shareholders.
See our latest analysis for PPHE Hotel Group
How Fast Is PPHE Hotel Group Growing Its Earnings Per Share?
Over the last three years, PPHE Hotel Group has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. As a result, we'll zoom in on growth over the last year, instead. To the delight of shareholders, PPHE Hotel Group's EPS soared from UK£0.53 to UK£0.67, over the last year. That's a fantastic gain of 28%.
Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. EBIT margins for PPHE Hotel Group remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 6.8% to UK£443m. That's progress.
You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.
Fortunately, we've got access to analyst forecasts of PPHE Hotel Group's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.
Are PPHE Hotel Group Insiders Aligned With All Shareholders?
It's a necessity that company leaders act in the best interest of shareholders and so insider investment always comes as a reassurance to the market. Shareholders will be pleased by the fact that insiders own PPHE Hotel Group shares worth a considerable sum. Indeed, they have a considerable amount of wealth invested in it, currently valued at UK£81m. This totals to 15% of shares in the company. Enough to lead management's decision making process down a path that brings the most benefit to shareholders. Very encouraging.