Is Now The Time To Put HomeTrust Bancshares (NASDAQ:HTBI) On Your Watchlist?

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 as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.

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 HomeTrust Bancshares (NASDAQ:HTBI). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide HomeTrust Bancshares with the means to add long-term value to shareholders.

Check out our latest analysis for HomeTrust Bancshares

How Quickly Is HomeTrust Bancshares Increasing Earnings Per Share?

The market is a voting machine in the short term, but a weighing machine in the long term, so you'd expect share price to follow earnings per share (EPS) outcomes eventually. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. HomeTrust Bancshares' shareholders have have plenty to be happy about as their annual EPS growth for the last 3 years was 40%. That sort of growth rarely ever lasts long, but it is well worth paying attention to when it happens.

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. It's noted that HomeTrust Bancshares' 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 HomeTrust Bancshares achieved similar EBIT margins to last year, revenue grew by a solid 2.8% to US$187m. That's progress.

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.

In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of HomeTrust Bancshares' forecast profits?

Are HomeTrust Bancshares 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. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.

In the last twelve months HomeTrust Bancshares insiders spent US$36k on stock; good news for shareholders. While this investment may be modest, it is great considering the lack of insider selling.

On top of the insider buying, it's good to see that HomeTrust Bancshares insiders have a valuable investment in the business. Given insiders own a significant chunk of shares, currently valued at US$75m, they have plenty of motivation to push the business to succeed. At 12% of the company, the co-investment by insiders fosters confidence that management will make long-term focussed decisions.

While insiders already own a significant amount of shares, and they have been buying more, the good news for ordinary shareholders does not stop there. That's because HomeTrust Bancshares' CEO, C. Westbrook, is paid at a relatively modest level when compared to other CEOs for companies of this size. Our analysis has discovered that the median total compensation for the CEOs of companies like HomeTrust Bancshares with market caps between US$400m and US$1.6b is about US$3.2m.

The CEO of HomeTrust Bancshares only received US$765k in total compensation for the year ending December 2023. That looks like a modest pay packet, and may hint at a certain respect for the interests of shareholders. CEO remuneration levels are not the most important metric for investors, but when the pay is modest, that does support enhanced alignment between the CEO and the ordinary shareholders. It can also be a sign of good governance, more generally.

Does HomeTrust Bancshares Deserve A Spot On Your Watchlist?

HomeTrust Bancshares' earnings per share have been soaring, with growth rates sky high. To make matters even better, the company insiders who know the company best have put their faith in the its future and have been buying more stock. These factors seem to indicate the company's potential and that it has reached an inflection point. We'd suggest HomeTrust Bancshares belongs near the top of your watchlist. We don't want to rain on the parade too much, but we did also find 1 warning sign for HomeTrust Bancshares 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 HomeTrust Bancshares, you'll probably love this curated collection of companies in the US that have an attractive valuation 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.

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.