We Ran A Stock Scan For Earnings Growth And Koninklijke Ahold Delhaize (AMS:AD) Passed With Ease

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. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Koninklijke Ahold Delhaize (AMS:AD). While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.

View our latest analysis for Koninklijke Ahold Delhaize

Koninklijke Ahold Delhaize's Earnings Per Share Are Growing

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. That means EPS growth is considered a real positive by most successful long-term investors. Over the last three years, Koninklijke Ahold Delhaize has grown EPS by 13% per year. That growth rate is fairly good, assuming the company can keep it up.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. While we note Koninklijke Ahold Delhaize achieved similar EBIT margins to last year, revenue grew by a solid 15% to €89b. That's a real positive.

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.

Fortunately, we've got access to analyst forecasts of Koninklijke Ahold Delhaize's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are Koninklijke Ahold Delhaize 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. Because often, the purchase of stock is a sign that the buyer views it as undervalued. However, small purchases are not always indicative of conviction, and insiders don't always get it right.

We do note that, in the last year, insiders sold €7.3m worth of shares. But that's far less than the €9.7m insiders spent purchasing stock. This adds to the interest in Koninklijke Ahold Delhaize because it suggests that those who understand the company best, are optimistic. It is also worth noting that it was President Frans W. Muller who made the biggest single purchase, worth €4.8m, paying €31.55 per share.

Along with the insider buying, another encouraging sign for Koninklijke Ahold Delhaize is that insiders, as a group, have a considerable shareholding. As a matter of fact, their holding is valued at €26m. That's a lot of money, and no small incentive to work hard. Even though that's only about 0.09% of the company, it's enough money to indicate alignment between the leaders of the business and ordinary shareholders.

Should You Add Koninklijke Ahold Delhaize To Your Watchlist?

One important encouraging feature of Koninklijke Ahold Delhaize is that it is growing profits. Better yet, insiders are significant shareholders, and have been buying more shares. That should do plenty in prompting budding investors to undertake a bit more research - or even adding the company to their watchlists. It's still necessary to consider the ever-present spectre of investment risk. We've identified 1 warning sign with Koninklijke Ahold Delhaize , and understanding this should be part of your investment process.

The good news is that Koninklijke Ahold Delhaize is not the only growth stock with insider buying. Here's a list of them... 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.