Should You Be Adding Willis Lease Finance (NASDAQ:WLFC) To Your Watchlist Today?

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. 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.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Willis Lease Finance (NASDAQ:WLFC). 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 discovered 3 warning signs about Willis Lease Finance. View them for free.

How Fast Is Willis Lease Finance Growing Its Earnings Per Share?

Over the last three years, Willis Lease Finance has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. As a result, we'll zoom in on growth over the last year, instead. Willis Lease Finance's EPS shot up from US$8.91 to US$13.02; a result that's bound to keep shareholders happy. That's a impressive gain of 46%.

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 Willis Lease Finance's revenue from operations was lower than its revenue in the last twelve months, so that could distort our analysis of its margins. The music to the ears of Willis Lease Finance shareholders is that EBIT margins have grown from 37% to 43% in the last 12 months and revenues are on an upwards trend as well. That's great to see, on both counts.

The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.

Check out our latest analysis for Willis Lease Finance

While profitability drives the upside, prudent investors always check the balance sheet, too.

Are Willis Lease Finance Insiders Aligned With All Shareholders?

It's pleasing to see company leaders with putting their money on the line, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. Shareholders will be pleased by the fact that insiders own Willis Lease Finance shares worth a considerable sum. Notably, they have an enviable stake in the company, worth US$374m. That equates to 31% of the company, making insiders powerful and aligned with other shareholders. Looking very optimistic for investors.

Should You Add Willis Lease Finance To Your Watchlist?

If you believe that share price follows earnings per share you should definitely be delving further into Willis Lease Finance's strong EPS growth. Further, the high level of insider ownership is impressive and suggests that the management appreciates the EPS growth and has faith in Willis Lease Finance's continuing strength. The growth and insider confidence is looked upon well and so it's worthwhile to investigate further with a view to discern the stock's true value. Don't forget that there may still be risks. For instance, we've identified 3 warning signs for Willis Lease Finance (1 makes us a bit uncomfortable) you should be aware of.

While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in the US with promising growth potential and insider confidence.

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.