Should You Be Adding Cyrela Brazil Realty Empreendimentos e Participações (BVMF:CYRE3) To Your Watchlist Today?

Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story stocks' without revenue, let alone profit. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.

In contrast to all that, I prefer to spend time on companies like Cyrela Brazil Realty Empreendimentos e Participações (BVMF:CYRE3), which has not only revenues, but also profits. Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. Loss-making companies are always racing against time to reach financial sustainability, but time is often a friend of the profitable company, especially if it is growing.

Check out our latest analysis for Cyrela Brazil Realty Empreendimentos e Participações

How Fast Is Cyrela Brazil Realty Empreendimentos e Participações Growing Its Earnings Per Share?

In a capitalist society capital chases profits, and that means share prices tend rise with earnings per share (EPS). So like the hint of a smile on a face that I love, growing EPS generally makes me look twice. It is therefore awe-striking that Cyrela Brazil Realty Empreendimentos e Participações's EPS went from R$1.08 to R$4.58 in just one year. When you see earnings grow that quickly, it often means good things ahead for the company.

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. Cyrela Brazil Realty Empreendimentos e Participações's EBIT margins have actually improved by 2.6 percentage points in the last year, to reach 13%, but, on the flip side, revenue was down 2.7%. That falls short of ideal.

You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.

Of course the knack is to find stocks that have their best days in the future, not in the past. You could base your opinion on past performance, of course, but you may also want to check this interactive graph of professional analyst EPS forecasts for Cyrela Brazil Realty Empreendimentos e Participações.

Are Cyrela Brazil Realty Empreendimentos e Participações Insiders Aligned With All Shareholders?

I like company leaders to have some skin in the game, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. As a result, I'm encouraged by the fact that insiders own Cyrela Brazil Realty Empreendimentos e Participações shares worth a considerable sum. Indeed, they have a glittering mountain of wealth invested in it, currently valued at R$2.4b. That equates to 26% of the company, making insiders powerful and aligned with other shareholders. Very encouraging.

Does Cyrela Brazil Realty Empreendimentos e Participações Deserve A Spot On Your Watchlist?

Cyrela Brazil Realty Empreendimentos e Participações's earnings per share growth have been levitating higher, like a mountain goat scaling the Alps. That EPS growth certainly has my attention, and the large insider ownership only serves to further stoke my interest. The hope is, of course, that the strong growth marks a fundamental improvement in the business economics. So to my mind Cyrela Brazil Realty Empreendimentos e Participações is worth putting on your watchlist; after all, shareholders do well when the market underestimates fast growing companies. It is worth noting though that we have found 4 warning signs for Cyrela Brazil Realty Empreendimentos e Participações (1 is concerning!) that you need to take into consideration.

You can invest in any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies 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. 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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