If EPS Growth Is Important To You, Lindsay Australia (ASX:LAU) Presents An Opportunity

Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.

In contrast to all that, many investors prefer to focus on companies like Lindsay Australia (ASX:LAU), which has not only revenues, but also profits. While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.

See our latest analysis for Lindsay Australia

Lindsay Australia's Improving Profits

Over the last three years, Lindsay Australia has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. Thus, it makes sense to focus on more recent growth rates, instead. Impressively, Lindsay Australia's EPS catapulted from AU$0.064 to AU$0.11, over the last year. It's not often a company can achieve year-on-year growth of 74%.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. The music to the ears of Lindsay Australia shareholders is that EBIT margins have grown from 5.6% to 8.3% in the last 12 months and revenues are on an upwards trend as well. Both of which are great metrics to check off for potential growth.

You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.

While we live in the present moment, there's little doubt that the future matters most in the investment decision process. So why not check this interactive chart depicting future EPS estimates, for Lindsay Australia?

Are Lindsay Australia Insiders Aligned With All Shareholders?

Investors are always searching for a vote of confidence in the companies they hold and insider buying is one of the key indicators for optimism on the market. Because often, the purchase of stock is a sign that the buyer views it as undervalued. Of course, we can never be sure what insiders are thinking, we can only judge their actions.

Not only did Lindsay Australia insiders refrain from selling stock during the year, but they also spent AU$112k buying it. This is a good look for the company as it paints an optimistic picture for the future. We also note that it was the Independent Non Executive Chairman, Ian Williams, who made the biggest single acquisition, paying AU$100k for shares at about AU$1.15 each.

On top of the insider buying, it's good to see that Lindsay Australia insiders have a valuable investment in the business. To be specific, they have AU$52m worth of shares. This considerable investment should help drive long-term value in the business. That amounts to 15% of the company, demonstrating a degree of high-level alignment with shareholders.

Should You Add Lindsay Australia To Your Watchlist?

Lindsay Australia's earnings per share growth have been climbing higher at an appreciable rate. To make matters even better, the company insiders who know the company best have put their faith in the its future and have been buying more stock. This quick rundown suggests that the business may be of good quality, and also at an inflection point, so maybe Lindsay Australia deserves timely attention. Before you take the next step you should know about the 2 warning signs for Lindsay Australia that we have uncovered.

The good news is that Lindsay Australia 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.

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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.