Does PNC Financial Services Group (NYSE:PNC) Deserve A Spot 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. 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. 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 PNC Financial Services Group (NYSE:PNC). 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.

Check out our latest analysis for PNC Financial Services Group

PNC Financial Services Group's Earnings Per Share Are 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) outcomes. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Recognition must be given to the that PNC Financial Services Group has grown EPS by 38% per year, over the last three years. While that sort of growth rate isn't sustainable for long, it certainly catches the eye of prospective investors.

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 PNC Financial Services Group's revenue from operations was lower than its revenue in the last twelve months, so that could distort our analysis of its margins. It was a year of stability for PNC Financial Services Group as both revenue and EBIT margins remained have been flat over the past year. That's not a major concern but nor does it point to the long term growth we like to see.

The chart below shows how the company's bottom and top lines have progressed over time. Click on the chart to see the exact numbers.

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 PNC Financial Services Group's future profits.

Are PNC Financial Services 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. 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.

Even though some insiders sold down their holdings, their actions speak louder than words with US$479k more invested than sold by people who know they company best. An optimistic sign for those with PNC Financial Services Group in their watchlist. We also note that it was the Chairman, William Demchak, who made the biggest single acquisition, paying US$1.0m for shares at about US$153 each.

On top of the insider buying, it's good to see that PNC Financial Services Group insiders have a valuable investment in the business. Indeed, they have a considerable amount of wealth invested in it, currently valued at US$231m. We note that this amounts to 0.4% of the company, which may be small owing to the sheer size of PNC Financial Services Group but it's still worth mentioning. This still shows shareholders there is a degree of alignment between management and themselves.

Should You Add PNC Financial Services Group To Your Watchlist?

PNC Financial Services Group's earnings have taken off in quite an impressive fashion. 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 PNC Financial Services Group belongs near the top of your watchlist. Don't forget that there may still be risks. For instance, we've identified 1 warning sign for PNC Financial Services Group that you should be aware of.

Keen growth investors love to see insider buying. Thankfully, PNC Financial Services Group isn't the only one. You can see a a curated list of companies which have exhibited consistent growth accompanied by recent insider buying.

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.