Yahoo Finance Here's Why We Think DuPont de Nemours (NYSE:DD) Might Deserve Your Attention Today
It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. 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 DuPont de Nemours (NYSE:DD). 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.
View our latest analysis for DuPont de Nemours
How Fast Is DuPont de Nemours Growing Its Earnings Per Share?
DuPont de Nemours has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. So it would be better to isolate the growth rate over the last year for our analysis. DuPont de Nemours boosted its trailing twelve month EPS from US$1.90 to US$2.32, in the last year. That's a 22% gain; respectable growth in the broader scheme of things. It also seems the company is in good financial health, since it has boosted EPS by buying back shares.
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. DuPont de Nemours reported flat revenue and EBIT margins over the last year. That's not a major concern but nor does it point to the long term growth we like to see.
The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.
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 DuPont de Nemours' future profits.
Are DuPont de Nemours Insiders Aligned With All Shareholders?
We would not expect to see insiders owning a large percentage of a US$31b company like DuPont de Nemours. But we do take comfort from the fact that they are investors in the company. Given insiders own a significant chunk of shares, currently valued at US$50m, they have plenty of motivation to push the business to succeed. That's certainly enough to let shareholders know that management will be very focussed on long term growth.
Should You Add DuPont de Nemours To Your Watchlist?
One important encouraging feature of DuPont de Nemours is that it is growing profits. If that's not enough on its own, there is also the rather notable levels of insider ownership. These two factors are a huge highlight for the company which should be a strong contender your watchlists. We should say that we've discovered 1 warning sign for DuPont de Nemours that you should be aware of before investing here.
Although DuPont de Nemours certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see insider buying, then this free list of growing companies that insiders are buying, could be exactly what you're looking for.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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