Is Now The Time To Put Manx Financial Group (LON:MFX) On Your Watchlist?

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. 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. 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 Manx Financial Group (LON:MFX). 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.

We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

How Quickly Is Manx Financial Group Increasing Earnings Per Share?

If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS) outcomes. That makes EPS growth an attractive quality for any company. Shareholders will be happy to know that Manx Financial Group's EPS has grown 31% each year, compound, over three years. If the company can sustain that sort of growth, we'd expect shareholders to come away satisfied.

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. It's noted that Manx Financial Group's revenue from operations was lower than its revenue in the last twelve months, so that could distort our analysis of its margins. While we note Manx Financial Group achieved similar EBIT margins to last year, revenue grew by a solid 11% to UK£40m. That's a real positive.

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.

View our latest analysis for Manx Financial Group

Manx Financial Group isn't a huge company, given its market capitalisation of UK£37m. That makes it extra important to check on its balance sheet strength.

Are Manx Financial Group Insiders Aligned With All Shareholders?

Investors are always searching for a vote of confidence in the companies they hold and insider buying is one of the key indicators for optimism on the market. Because often, the purchase of stock is a sign that the buyer views it as undervalued. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.

We haven't seen any insiders selling Manx Financial Group shares, in the last year. So it's definitely nice that Group Finance Director & Executive Director James Andrew Smeed bought UK£6.9k worth of shares at an average price of around UK£0.27. Decent buying like this could be a sign for shareholders here; management sees the company as undervalued.

And the insider buying isn't the only sign of alignment between shareholders and the board, since Manx Financial Group insiders own more than a third of the company. In fact, they own 36% of the shares, making insiders a very influential shareholder group. Shareholders and speculators should be reassured by this kind of alignment, as it suggests the business will be run for the benefit of shareholders. With that sort of holding, insiders have about UK£13m riding on the stock, at current prices. So there's plenty there to keep them focused!

Does Manx Financial Group Deserve A Spot On Your Watchlist?

If you believe that share price follows earnings per share you should definitely be delving further into Manx Financial Group's strong EPS growth. Moreover, the management and board of the company hold a significant stake in the company, with one party adding to this total. So it's fair to say that this stock may well deserve a spot on your watchlist. We should say that we've discovered 5 warning signs for Manx Financial Group (2 are significant!) that you should be aware of before investing here.

Keen growth investors love to see insider activity. Thankfully, Manx Financial Group isn't the only one. You can see a a curated list of British 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.