Should You Be Adding IBI Group (TSE:IBG) To Your Watchlist Today?

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. And in their study titled Who Falls Prey to the Wolf of Wall Street?' Leuz et. al. found that it is 'quite common' for investors to lose money by buying into 'pump and dump' schemes.

If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in IBI Group (TSE:IBG). 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.

Check out our latest analysis for IBI Group

How Quickly Is IBI Group Increasing Earnings Per Share?

If a company can keep growing earnings per share (EPS) long enough, its share price will eventually follow. That makes EPS growth an attractive quality for any company. IBI Group managed to grow EPS by 16% per year, over three years. That growth rate is fairly good, assuming the company can keep it up.

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 IBI Group's EBIT margins were flat over the last year, revenue grew by a solid 9.7% to CA$505m. That's a real positive.

In the chart below, you can see how the company has grown earnings, and revenue, over time. For finer detail, click on the image.

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

Are IBI Group Insiders Aligned With All Shareholders?

Like that fresh smell in the air when the rains are coming, insider buying fills me with optimistic anticipation. 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.

Not only did IBI Group insiders refrain from selling stock during the year, but they also spent CA$108k buying it. That's nice to see, because it suggests insiders are optimistic. It is also worth noting that it was Dale Richmond who made the biggest single purchase, worth CA$60k, paying CA$6.30 per share.

Is IBI Group Worth Keeping An Eye On?

One important encouraging feature of IBI Group is that it is growing profits. While some companies are struggling to grow EPS, IBI Group seems free from that morose affliction. The gravy on the mushroom pie is the insider buying, which has me tasting potential opportunity; one for the watchlist, I'd posit. However, before you get too excited we've discovered 1 warning sign for IBI Group that you should be aware of.

As a growth investor I do like to see insider buying. But IBI Group isn't the only one. You can see a a free list of them here.

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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