New Zealand markets close in 6 hours 42 minutes
  • NZX 50

    11,018.62
    +20.72 (+0.19%)
     
  • NZD/USD

    0.6239
    -0.0065 (-1.03%)
     
  • ALL ORDS

    6,953.40
    +59.80 (+0.87%)
     
  • OIL

    111.78
    +0.02 (+0.02%)
     
  • GOLD

    1,821.20
    0.00 (0.00%)
     

Do Sealed Air's (NYSE:SEE) Earnings Warrant Your Attention?

·3-min read

Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses.

If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in Sealed Air (NYSE:SEE). Now, I'm not saying that the stock is necessarily undervalued today; but I can't shake an appreciation for the profitability of the business itself. 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 Sealed Air

Sealed Air's Earnings Per Share Are Growing.

The market is a voting machine in the short term, but a weighing machine in the long term, so share price follows earnings per share (EPS) eventually. That means EPS growth is considered a real positive by most successful long-term investors. Over the last three years, Sealed Air has grown EPS by 11% per year. That's a pretty good rate, if the company can sustain it.

I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. While we note Sealed Air's EBIT margins were flat over the last year, revenue grew by a solid 14% to US$5.7b. That's a real positive.

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.

earnings-and-revenue-history
earnings-and-revenue-history

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 Sealed Air's future profits.

Are Sealed Air Insiders Aligned With All Shareholders?

Like standing at the lookout, surveying the horizon at sunrise, insider buying, for some investors, sparks joy. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.

Sealed Air top brass are certainly in sync, not having sold any shares, over the last year. But my excitement comes from the US$65k that Senior VP & CFO Christopher Stephens spent buying shares (at an average price of about US$65.28).

Along with the insider buying, another encouraging sign for Sealed Air is that insiders, as a group, have a considerable shareholding. Given insiders own a small fortune of shares, currently valued at US$53m, they have plenty of motivation to push the business to succeed. This should keep them focused on creating long term value for shareholders.

Is Sealed Air Worth Keeping An Eye On?

As I already mentioned, Sealed Air is a growing business, which is what I like to see. On top of that, we've seen insiders buying shares even though they already own plenty. To me, that all makes it well worth a spot on your watchlist, as well as continuing research. Even so, be aware that Sealed Air is showing 1 warning sign in our investment analysis , you should know about...

The good news is that Sealed Air is not the only growth stock with insider buying. Here's a list of them... with insider buying in the last three months!

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting