Many investors, especially those just starting out, often buy shares in companies that have a compelling story, even if those companies aren’t making a profit. This can be a risky move. Investments in loss-making companies can be like throwing money into a black hole, so it’s important to be cautious.
Despite the trend of chasing tech stocks, some investors prefer a more traditional approach. They buy shares in companies like New Oriental Education & Technology Group (NYSE: EDU), which has a consistent profit record. While profit isn’t the only thing to consider, it’s certainly a key indicator of a company’s health.
How quickly is New Oriental Education & Technology Group growing its earnings? Over the last year, its earnings per share (EPS) jumped from $1.85 to $2.39, marking a 30% increase. That’s impressive!
To get a clearer picture of growth, we also look at revenue and earnings before interest and tax (EBIT) margins. New Oriental’s EBIT margins stayed stable over the past year, but its revenue grew by an impressive 34%, reaching $4.8 billion. That’s encouraging news indeed!
It’s essential to keep an eye on future growth as well. Interested readers can explore a free report that outlines analyst expectations for New Oriental’s upcoming profits.
What about insider ownership? With a market cap of $7.7 billion, it’s not surprising that insiders don’t own a massive slice of the company. However, they hold shares worth $942 million, which is about 12% of the company. This shows that insiders are invested and aligned with shareholders, a positive sign for investors.
If you think share prices reflect earnings growth, New Oriental’s rising EPS is worth a closer look. Such growth suggests the company is on a solid path, which is further backed by insider confidence. This combination makes it an interesting stock to follow.
That said, just because New Oriental is growing doesn’t mean it’s a bargain. If you’re interested in its valuation, it’s wise to compare its price-to-earnings ratio against its industry peers.
For investors who prioritize companies with growing earnings and insider investment, we’ve compiled a list of promising U.S. companies meeting these criteria.
Please note, discussions about insider transactions refer to reportable actions in the relevant jurisdiction.
Valuation can be complex, but we aim to simplify it. Find out if New Oriental Education & Technology Group might be undervalued or overvalued through our analysis. This includes fair value estimates, potential risks, dividends, insider trades, and overall financial condition.
