Is Now The Time To Put ACS Actividades de Construcción y Servicios (BME:ACS) 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. 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 can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

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 ACS Actividades de Construcción y Servicios (BME:ACS). 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.

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How Quickly Is ACS Actividades de Construcción y Servicios Increasing Earnings Per Share?

Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. That makes EPS growth an attractive quality for any company. Recognition must be given to the that ACS Actividades de Construcción y Servicios has grown EPS by 55% per year, over the last three years. While that sort of growth rate isn't sustainable for long, it certainly catches the eye of prospective investors.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. ACS Actividades de Construcción y Servicios shareholders can take confidence from the fact that EBIT margins are up from 1.0% to 3.6%, and revenue is growing. 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. To see the actual numbers, click on the chart.

View our latest analysis for ACS Actividades de Construcción y Servicios

You don't drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for ACS Actividades de Construcción y Servicios' future profits.

Are ACS Actividades de Construcción y Servicios Insiders Aligned With All Shareholders?

Since ACS Actividades de Construcción y Servicios has a market capitalisation of €17b, we wouldn't expect insiders to hold a large percentage of shares. But thanks to their investment in the company, it's pleasing to see that there are still incentives to align their actions with the shareholders. Holding €76m worth of stock in the company is no laughing matter and insiders will be committed in delivering the best outcomes for shareholders. That's certainly enough to let shareholders know that management will be very focussed on long term growth.

Should You Add ACS Actividades de Construcción y Servicios To Your Watchlist?

ACS Actividades de Construcción y Servicios' earnings per share have been soaring, with growth rates sky high. That EPS growth certainly is attention grabbing, and the large insider ownership only serves to further stoke our interest. The hope is, of course, that the strong growth marks a fundamental improvement in the business economics. So at the surface level, ACS Actividades de Construcción y Servicios is worth putting on your watchlist; after all, shareholders do well when the market underestimates fast growing companies. Even so, be aware that ACS Actividades de Construcción y Servicios is showing 2 warning signs in our investment analysis , and 1 of those doesn't sit too well with us...

While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in ES with promising growth potential and insider confidence.

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.