With EPS Growth And More, Marks and Spencer Group (LON:MKS) Makes An Interesting Case

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.

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 Marks and Spencer Group (LON:MKS). 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.

View our latest analysis for Marks and Spencer Group

How Fast Is Marks and Spencer Group Growing Its Earnings Per Share?

In the last three years Marks and Spencer Group'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. It's good to see that Marks and Spencer Group's EPS has grown from UK£0.16 to UK£0.20 over twelve months. There's little doubt shareholders would be happy with that 24% gain.

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. While we note Marks and Spencer Group achieved similar EBIT margins to last year, revenue grew by a solid 11% to UK£13b. That's progress.

In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.

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

Are Marks and Spencer Group 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. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. Of course, we can never be sure what insiders are thinking, we can only judge their actions.

The good news for Marks and Spencer Group shareholders is that no insiders reported selling shares in the last year. So it's definitely nice that Independent Non-Executive Director Fiona Dawson bought UK£20k worth of shares at an average price of around UK£2.19. Purchases like this can help the investors understand the views of the management team; in which case they see some potential in Marks and Spencer Group.

Does Marks and Spencer Group Deserve A Spot On Your Watchlist?

One positive for Marks and Spencer Group is that it is growing EPS. That's nice to see. While some companies are struggling to grow EPS, Marks and Spencer Group seems free from that morose affliction. The cherry on top is that we have an insider buying shares. A further encouragement to keep an eye on this stock. We don't want to rain on the parade too much, but we did also find 1 warning sign for Marks and Spencer Group that you need to be mindful of.

There are plenty of other companies that have insiders buying up shares. So if you like the sound of Marks and Spencer Group, you'll probably love this curated collection of companies in GB that have witnessed growth 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.