Here's Why Barrick Mining (TSE:ABX) 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 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 Barrick Mining (TSE:ABX), which has not only revenues, but also profits. Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Barrick Mining with the means to add long-term value to shareholders.

We've discovered 1 warning sign about Barrick Mining. View them for free.

How Quickly Is Barrick Mining Increasing Earnings Per Share?

If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS) outcomes. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. We can see that in the last three years Barrick Mining grew its EPS by 7.7% per year. While that sort of growth rate isn't anything to write home about, it does show the business is growing.

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 good news is that Barrick Mining is growing revenues, and EBIT margins improved by 12.8 percentage points to 39%, over the last year. Ticking those two boxes is a good sign of growth, in our book.

You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.

Check out our latest analysis for Barrick Mining

In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of Barrick Mining's forecast profits?

Are Barrick Mining Insiders Aligned With All Shareholders?

Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. Because often, the purchase of stock is a sign that the buyer views it as undervalued. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.

Although we did see some insider selling (worth US$11m) this was overshadowed by a mountain of buying, totalling US$31m in just one year. This bodes well for Barrick Mining as it highlights the fact that those who are important to the company having a lot of faith in its future. We also note that it was the President, Dennis Bristow, who made the biggest single acquisition, paying CA$5.9m for shares at about CA$25.72 each.

Along with the insider buying, another encouraging sign for Barrick Mining is that insiders, as a group, have a considerable shareholding. Notably, they have an enviable stake in the company, worth US$339m. We note that this amounts to 0.8% of the company, which may be small owing to the sheer size of Barrick Mining but it's still worth mentioning. This still shows shareholders there is a degree of alignment between management and themselves.

Should You Add Barrick Mining To Your Watchlist?

One important encouraging feature of Barrick Mining is that it is growing profits. In addition, insiders have been busy adding to their sizeable holdings in the company. These factors alone make the company an interesting prospect for your watchlist, as well as continuing research. Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Barrick Mining that you should be aware of.

There are plenty of other companies that have insiders buying up shares. So if you like the sound of Barrick Mining, you'll probably love this curated collection of companies in CA that have an attractive valuation alongside 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.