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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. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.
So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like IntegraFin Holdings (LON:IHP). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide IntegraFin Holdings with the means to add long-term value to shareholders.
Check out our latest analysis for IntegraFin Holdings
How Fast Is IntegraFin Holdings Growing Its Earnings Per Share?
Even with very modest growth rates, a company will usually do well if it improves earnings per share (EPS) year after year. So it's no surprise that some investors are more inclined to invest in profitable businesses. Over the last year, IntegraFin Holdings increased its EPS from UK£0.15 to UK£0.16. That's a fair increase of 4.2%.
Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. It's noted that, last year, IntegraFin Holdings' revenue from operations was lower than its revenue, so that could distort our analysis of its margins. The good news is that IntegraFin Holdings is growing revenues, and EBIT margins improved by 17.6 percentage points to 67%, over the last year. That's great to see, on both counts.
In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.
Fortunately, we've got access to analyst forecasts of IntegraFin Holdings' future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.
Are IntegraFin Holdings Insiders Aligned With All Shareholders?
It's pleasing to see company leaders with putting their money on the line, 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 IntegraFin Holdings insiders have a significant amount of capital invested in the stock. We note that their impressive stake in the company is worth UK£94m. This suggests that leadership will be very mindful of shareholders' interests when making decisions!