Here's Why IAMGOLD (TSE:IMG) Has Caught The Eye Of Investors

It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. 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 IAMGOLD (TSE:IMG), which has not only revenues, but also profits. Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.

Check out our latest analysis for IAMGOLD

How Quickly Is IAMGOLD Increasing Earnings Per Share?

Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. Impressively, IAMGOLD has grown EPS by 20% per year, compound, in the last three years. As a general rule, we'd say that if a company can keep up that sort of growth, shareholders will be beaming.

It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. IAMGOLD shareholders can take confidence from the fact that EBIT margins are up from 0.8% to 15%, and revenue is growing. Ticking those two boxes is a good sign of growth, in our book.

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 IAMGOLD's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are IAMGOLD 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, small purchases are not always indicative of conviction, and insiders don't always get it right.

Insiders both bought and sold IAMGOLD shares in the last year, but the good news is they spent US$64k more buying than they netted selling. At face value we can consider this a fairly encouraging sign for the company. It is also worth noting that it was CEO, President & Director Renaud Adams who made the biggest single purchase, worth CA$251k, paying CA$5.71 per share.

Does IAMGOLD Deserve A Spot On Your Watchlist?

You can't deny that IAMGOLD has grown its earnings per share at a very impressive rate. That's attractive. Not only is that growth rate rather juicy, but the insider buying adds fuel to the fire. To put it succinctly; IAMGOLD is a strong candidate for your watchlist. Don't forget that there may still be risks. For instance, we've identified 2 warning signs for IAMGOLD (1 doesn't sit too well with us) you should be aware of.

Keen growth investors love to see insider activity. Thankfully, IAMGOLD isn't the only one. You can see a a curated list of Canadian companies which have exhibited consistent growth accompanied by high insider ownership.

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.