Should You Be Adding EssilorLuxottica Société anonyme (EPA:EL) To Your Watchlist Today?

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. 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. 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.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like EssilorLuxottica Société anonyme (EPA:EL). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide EssilorLuxottica Société anonyme with the means to add long-term value to shareholders.

View our latest analysis for EssilorLuxottica Société anonyme

EssilorLuxottica Société anonyme's Improving Profits

In the last three years EssilorLuxottica Société anonyme's earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. As a result, we'll zoom in on growth over the last year, instead. Over the last year, EssilorLuxottica Société anonyme increased its EPS from €4.87 to €5.06. That amounts to a small improvement of 4.0%.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. EssilorLuxottica Société anonyme maintained stable EBIT margins over the last year, all while growing revenue 3.7% to €25b. That's encouraging news for the company!

The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.

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 EssilorLuxottica Société anonyme's future profits.

Are EssilorLuxottica Société anonyme Insiders Aligned With All Shareholders?

Since EssilorLuxottica Société anonyme has a market capitalisation of €92b, 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 €177m. While that is a lot of skin in the game, we note this holding only totals to 0.2% of the business, which is a result of the company being so large. This should still be a great incentive for management to maximise shareholder value.

Should You Add EssilorLuxottica Société anonyme To Your Watchlist?

As previously touched on, EssilorLuxottica Société anonyme is a growing business, which is encouraging. To add an extra spark to the fire, significant insider ownership in the company is another highlight. These two factors are a huge highlight for the company which should be a strong contender your watchlists. 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 EssilorLuxottica Société anonyme. You might benefit from giving it a glance today.

Although EssilorLuxottica Société anonyme certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with insider buying, then check out this handpicked selection of French companies that not only boast of strong growth but have also seen recent insider buying..

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.