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The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. 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.
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 Home Bancshares (Conway AR) (NYSE:HOMB). 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.
We check all companies for important risks. See what we found for Home Bancshares (Conway AR) in our free report.
Home Bancshares (Conway AR)'s Earnings Per Share Are Growing
If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. That makes EPS growth an attractive quality for any company. Over the last three years, Home Bancshares (Conway AR) has grown EPS by 5.7% per year. That might not be particularly high growth, but it does show that per-share earnings are moving steadily in the right direction.
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. Not all of Home Bancshares (Conway AR)'s revenue this year is revenue from operations, so keep in mind the revenue and margin numbers used in this article might not be the best representation of the underlying business. It was a year of stability for Home Bancshares (Conway AR) as both revenue and EBIT margins remained have been flat over the past year. While this doesn't ring alarm bells, it may not meet the expectations of growth-minded investors.
In the chart below, you can see how the company has grown earnings and revenue, over time. To see the actual numbers, click on the chart.
Check out our latest analysis for Home Bancshares (Conway AR)
You don't drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for Home Bancshares (Conway AR)'s future profits.
Are Home Bancshares (Conway AR) Insiders Aligned With All Shareholders?
Owing to the size of Home Bancshares (Conway AR), we wouldn't expect insiders to hold a significant proportion of the company. But we do take comfort from the fact that they are investors in the company. We note that their impressive stake in the company is worth US$353m. This suggests that leadership will be very mindful of shareholders' interests when making decisions!