Here's Why We Think WillScot Mobile Mini Holdings (NASDAQ:WSC) Is Well Worth Watching

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it completely lacks a track record of revenue and profit. And in their study titled Who Falls Prey to the Wolf of Wall Street?' Leuz et. al. found that it is 'quite common' for investors to lose money by buying into 'pump and dump' schemes.

If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in WillScot Mobile Mini Holdings (NASDAQ:WSC). Now, I'm not saying that the stock is necessarily undervalued today; but I can't shake an appreciation for the profitability of the business itself. While a well funded company may sustain losses for years, unless its owners have an endless appetite for subsidizing the customer, it will need to generate a profit eventually, or else breathe its last breath.

See our latest analysis for WillScot Mobile Mini Holdings

How Fast Is WillScot Mobile Mini Holdings Growing Its Earnings Per Share?

Over the last three years, WillScot Mobile Mini Holdings has grown earnings per share (EPS) like young bamboo after rain; fast, and from a low base. So I don't think the percent growth rate is particularly meaningful. Thus, it makes sense to focus on more recent growth rates, instead. Like a falcon taking flight, WillScot Mobile Mini Holdings's EPS soared from US$0.44 to US$0.72, over the last year. That's a impressive gain of 64%.

I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. WillScot Mobile Mini Holdings maintained stable EBIT margins over the last year, all while growing revenue 39% to US$1.9b. That's progress.

In the chart below, you can see how the company has grown earnings, and revenue, over time. For finer detail, click on the image.

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

Are WillScot Mobile Mini Holdings Insiders Aligned With All Shareholders?

Like standing at the lookout, surveying the horizon at sunrise, insider buying, for some investors, sparks joy. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. 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 -US$204k worth of shares. But that's far less than the US$1.1m insiders spend purchasing stock. This makes me even more interested in WillScot Mobile Mini Holdings because it suggests that those who understand the company best, are optimistic. We also note that it was the Independent Director, Mark Bartlett, who made the biggest single acquisition, paying US$701k for shares at about US$28.04 each.

The good news, alongside the insider buying, for WillScot Mobile Mini Holdings bulls is that insiders (collectively) have a meaningful investment in the stock. Indeed, they have a glittering mountain of wealth invested in it, currently valued at US$171m. This suggests to me that leadership will be very mindful of shareholders' interests when making decisions!

Does WillScot Mobile Mini Holdings Deserve A Spot On Your Watchlist?

Given my belief that share price follows earnings per share you can easily imagine how I feel about WillScot Mobile Mini Holdings's strong EPS growth. On top of that, insiders own a significant stake in the company and have been buying more shares. So it's fair to say I think this stock may well deserve a spot on your watchlist. Don't forget that there may still be risks. For instance, we've identified 1 warning sign for WillScot Mobile Mini Holdings that you should be aware of.

The good news is that WillScot Mobile Mini Holdings 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.