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It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks with a good story, even if those businesses lose money. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.'
So if you're like me, you might be more interested in profitable, growing companies, like Artisan Partners Asset Management (NYSE:APAM). While profit is not necessarily a social good, it's easy to admire a business that can consistently produce it. While a well funded company may sustain losses for years, unless its owners have an endless appetite for subsidizing the customer, it will need to generate a profit eventually, or else breathe its last breath.
See our latest analysis for Artisan Partners Asset Management
How Quickly Is Artisan Partners Asset Management Increasing Earnings Per Share?
If a company can keep growing earnings per share (EPS) long enough, its share price will eventually follow. It's no surprise, then, that I like to invest in companies with EPS growth. It certainly is nice to see that Artisan Partners Asset Management has managed to grow EPS by 17% per year over three years. As a general rule, we'd say that if a company can keep up that sort of growth, shareholders will be smiling.
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. Artisan Partners Asset Management shareholders can take confidence from the fact that EBIT margins are up from 35% to 37%, and revenue is growing. That's great to see, on both counts.
You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.
In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of Artisan Partners Asset Management's forecast profits?
Are Artisan Partners Asset Management Insiders Aligned With All Shareholders?
Like the kids in the streets standing up for their beliefs, insider share purchases give me reason to believe in a brighter future. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. However, small purchases are not always indicative of conviction, and insiders don't always get it right.
One gleaming positive for Artisan Partners Asset Management, in the last year, is that a certain insider has buying shares with ample enthusiasm. Indeed, Independent Director Tench Coxe has accumulated shares over the last year, paying a total of US$3.2m at an average price of about US$21.02. Big insider buys like that are almost as rare as an ocean free of single use plastic waste.