Is Now The Time To Put Lindsay Australia (ASX:LAU) On Your Watchlist?

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. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.

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 Lindsay Australia (ASX:LAU). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Lindsay Australia with the means to add long-term value to shareholders.

See our latest analysis for Lindsay Australia

How Quickly Is Lindsay Australia Increasing Earnings Per Share?

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Shareholders will be happy to know that Lindsay Australia's EPS has grown 36% each year, compound, over three years. As a general rule, we'd say that if a company can keep up that sort of growth, shareholders will be beaming.

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. Lindsay Australia shareholders can take confidence from the fact that EBIT margins are up from 3.2% to 6.7%, and revenue is growing. That's great to see, on both counts.

In the chart below, you can see how the company has grown earnings and revenue, over time. To see the actual numbers, click on the chart.

Fortunately, we've got access to analyst forecasts of Lindsay Australia's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are Lindsay Australia Insiders Aligned With All Shareholders?

It should give investors a sense of security owning shares in a company if insiders also own shares, creating a close alignment their interests. So it is good to see that Lindsay Australia insiders have a significant amount of capital invested in the stock. Holding AU$83m worth of stock in the company is no laughing matter and insiders will be committed in delivering the best outcomes for shareholders. At 25% of the company, the co-investment by insiders fosters confidence that management will make long-term focussed decisions.

Does Lindsay Australia Deserve A Spot On Your Watchlist?

If you believe that share price follows earnings per share you should definitely be delving further into Lindsay Australia's strong EPS growth. This EPS growth rate is something the company should be proud of, and so it's no surprise that insiders are holding on to a considerable chunk of shares. Fast growth and confident insiders should be enough to warrant further research, so it would seem that it's a good stock to follow. We should say that we've discovered 1 warning sign for Lindsay Australia that you should be aware of before investing here.

Although Lindsay Australia 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.