Does F.I.L.A. - Fabbrica Italiana Lapis ed Affini (BIT:FILA) Deserve A Spot On Your Watchlist?

Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily 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.

If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in F.I.L.A. - Fabbrica Italiana Lapis ed Affini (BIT:FILA). While that doesn't make the shares worth buying at any price, you can't deny that successful capitalism requires profit, eventually. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.

Check out our latest analysis for F.I.L.A. - Fabbrica Italiana Lapis ed Affini

How Fast Is F.I.L.A. - Fabbrica Italiana Lapis ed Affini Growing?

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). It's no surprise, then, that I like to invest in companies with EPS growth. I, for one, am blown away by the fact that F.I.L.A. - Fabbrica Italiana Lapis ed Affini has grown EPS by 54% per year, over the last three years. While that sort of growth rate isn't sustainable for long, it certainly catches my attention; like a crow with a sparkly stone.

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. This approach makes F.I.L.A. - Fabbrica Italiana Lapis ed Affini look pretty good, on balance; although revenue is flattish, EBIT margins improved from 10% to 14% in the last year. That's something to smile about.

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.

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 F.I.L.A. - Fabbrica Italiana Lapis ed Affini's future profits.

Are F.I.L.A. - Fabbrica Italiana Lapis ed Affini Insiders Aligned With All Shareholders?

Personally, I like to see high insider ownership of a company, since it suggests that it will be managed in the interests of shareholders. So as you can imagine, the fact that F.I.L.A. - Fabbrica Italiana Lapis ed Affini insiders own a significant number of shares certainly appeals to me. Indeed, with a collective holding of 53%, company insiders are in control and have plenty of capital behind the venture. To me this is a good sign because it suggests they will be incentivised to build value for shareholders over the long term. And their holding is extremely valuable at the current share price, totalling €267m. That means they have plenty of their own capital riding on the performance of the business!

Should You Add F.I.L.A. - Fabbrica Italiana Lapis ed Affini To Your Watchlist?

F.I.L.A. - Fabbrica Italiana Lapis ed Affini's earnings per share have taken off like a rocket aimed right at the moon. That sort of growth is nothing short of eye-catching, and the large investment held by insiders certainly brightens my view of the company. The hope is, of course, that the strong growth marks a fundamental improvement in the business economics. So yes, on this short analysis I do think it's worth considering F.I.L.A. - Fabbrica Italiana Lapis ed Affini for a spot on your watchlist. Even so, be aware that F.I.L.A. - Fabbrica Italiana Lapis ed Affini is showing 3 warning signs in our investment analysis , you should know about...

You can invest in any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies with 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.
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