Here's Why Atmus Filtration Technologies (NYSE:ATMU) Has Caught The Eye Of Investors

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. 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.

Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Atmus Filtration Technologies (NYSE:ATMU). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

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How Fast Is Atmus Filtration Technologies Growing Its Earnings Per Share?

Even when EPS earnings per share (EPS) growth is unexceptional, company value can be created if this rate is sustained each year. So it's no surprise that some investors are more inclined to invest in profitable businesses. Atmus Filtration Technologies' EPS has risen over the last 12 months, growing from US$1.97 to US$2.24. There's little doubt shareholders would be happy with that 13% gain.

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. This approach makes Atmus Filtration Technologies look pretty good, on balance; although revenue is flattish, EBIT margins improved from 14% to 16% in the last year. Which is a great look for the company.

You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.

Check out our latest analysis for Atmus Filtration Technologies

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 Atmus Filtration Technologies' future profits.

Are Atmus Filtration Technologies Insiders Aligned With All Shareholders?

Investors are always searching for a vote of confidence in the companies they hold and insider buying is one of the key indicators for optimism on the market. Because often, the purchase of stock is a sign that the buyer views it as undervalued. Of course, we can never be sure what insiders are thinking, we can only judge their actions.

Shareholders in Atmus Filtration Technologies will be more than happy to see insiders committing themselves to the company, spending US$460k on shares in just twelve months. And when you consider that there was no insider selling, you can understand why shareholders might believe that there are brighter days ahead. We also note that it was the Independent Non-Executive Chairman, Stephen Macadam, who made the biggest single acquisition, paying US$260k for shares at about US$31.56 each.

On top of the insider buying, it's good to see that Atmus Filtration Technologies insiders have a valuable investment in the business. To be specific, they have US$19m worth of shares. That's a lot of money, and no small incentive to work hard. Even though that's only about 0.6% of the company, it's enough money to indicate alignment between the leaders of the business and ordinary shareholders.

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 Atmus Filtration Technologies' CEO, Steph Disher, is paid at a relatively modest level when compared to other CEOs for companies of this size. For companies with market capitalisations between US$2.0b and US$6.4b, like Atmus Filtration Technologies, the median CEO pay is around US$7.5m.

Atmus Filtration Technologies' CEO took home a total compensation package worth US$6.1m in the year leading up to December 2024. That is actually below the median for CEO's of similarly sized companies. While the level of CEO compensation shouldn't be the biggest factor in how the company is viewed, modest remuneration is a positive, because it suggests that the board keeps shareholder interests in mind. It can also be a sign of a culture of integrity, in a broader sense.

Should You Add Atmus Filtration Technologies To Your Watchlist?

One important encouraging feature of Atmus Filtration Technologies is that it is growing profits. On top of that, we've seen insiders buying shares even though they already own plenty. These factors alone make the company an interesting prospect for your watchlist, as well as continuing research. Before you take the next step you should know about the 1 warning sign for Atmus Filtration Technologies that we have uncovered.

There are plenty of other companies that have insiders buying up shares. So if you like the sound of Atmus Filtration Technologies, 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.

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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.