Yahoo Finance Here's Why ANZ Group Holdings (ASX:ANZ) Has Caught The Eye Of Investors
For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. 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. 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 ANZ Group Holdings (ASX:ANZ). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide ANZ Group Holdings with the means to add long-term value to shareholders.
View our latest analysis for ANZ Group Holdings
ANZ Group Holdings' Improving Profits
Even when EPS earnings per share (EPS) growth is unexceptional, company value can be created if this rate is sustained each year. So it's no surprise that some investors are more inclined to invest in profitable businesses. ANZ Group Holdings boosted its trailing twelve month EPS from AU$2.16 to AU$2.38, in the last year. There's little doubt shareholders would be happy with that 10% gain.
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. Our analysis has highlighted that ANZ Group Holdings' revenue from operations did not account for all of their revenue in the previous 12 months, so our analysis of its margins might not accurately reflect the underlying business. EBIT margins for ANZ Group Holdings remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 9.3% to AU$20b. That's progress.
The chart below shows how the company's bottom and top lines have progressed over time. Click on the chart to see the exact numbers.
Fortunately, we've got access to analyst forecasts of ANZ Group Holdings' future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.
Are ANZ Group Holdings Insiders Aligned With All Shareholders?
We would not expect to see insiders owning a large percentage of a AU$73b company like ANZ Group Holdings. But we do take comfort from the fact that they are investors in the company. Indeed, they hold AU$40m worth of its stock. This considerable investment should help drive long-term value in the business. Even though that's only about 0.05% of the company, it's enough money to indicate alignment between the leaders of the business and ordinary shareholders.
Should You Add ANZ Group Holdings To Your Watchlist?
One important encouraging feature of ANZ Group Holdings 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 2 warning signs for ANZ Group Holdings that you should be aware of before investing here.
Although ANZ Group Holdings 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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