Should You Be Adding Wärtsilä Oyj Abp (HEL:WRT1V) To Your Watchlist Today?

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

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 Wärtsilä Oyj Abp (HEL:WRT1V). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

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How Fast Is Wärtsilä Oyj Abp Growing Its Earnings Per Share?

Wärtsilä Oyj Abp has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. So it would be better to isolate the growth rate over the last year for our analysis. Wärtsilä Oyj Abp's EPS skyrocketed from €0.64 to €0.95, in just one year; a result that's bound to bring a smile to shareholders. That's a fantastic gain of 50%.

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. While we note Wärtsilä Oyj Abp achieved similar EBIT margins to last year, revenue grew by a solid 15% to €6.9b. That's progress.

You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.

Check out our latest analysis for Wärtsilä Oyj Abp

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

Are Wärtsilä Oyj Abp Insiders Aligned With All Shareholders?

Since Wärtsilä Oyj Abp has a market capitalisation of €15b, we wouldn't expect insiders to hold a large percentage of shares. But we are reassured by the fact they have invested in the company. We note that their impressive stake in the company is worth €215m. Investors will appreciate management having this amount of skin in the game as it shows their commitment to the company's future.

Is Wärtsilä Oyj Abp Worth Keeping An Eye On?

If you believe that share price follows earnings per share you should definitely be delving further into Wärtsilä Oyj Abp's strong EPS growth. With EPS growth rates like that, it's hardly surprising to see company higher-ups place confidence in the company through continuing to hold a significant investment. On the balance of its merits, solid EPS growth and company insiders who are aligned with the shareholders would indicate a business that is worthy of further research. Once you've identified a business you like, the next step is to consider what you think it's worth. And right now is your chance to view our exclusive discounted cashflow valuation of Wärtsilä Oyj Abp. You might benefit from giving it a glance today.

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 FI 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.