I Ran A Stock Scan For Earnings Growth And ABM Industries (NYSE:ABM) Passed With Ease

By
Simply Wall St
Published
February 21, 2022
NYSE:ABM
Source: Shutterstock

Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.'

If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in ABM Industries (NYSE:ABM). Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.

Check out our latest analysis for ABM Industries

How Fast Is ABM Industries Growing?

If a company can keep growing earnings per share (EPS) long enough, its share price will eventually follow. That makes EPS growth an attractive quality for any company. We can see that in the last three years ABM Industries grew its EPS by 8.9% per year. That's a good rate of growth, if it can be sustained.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. While we note ABM Industries's EBIT margins were flat over the last year, revenue grew by a solid 4.0% to US$6.2b. That's a real positive.

You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.

earnings-and-revenue-history
NYSE:ABM Earnings and Revenue History February 21st 2022

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

Are ABM Industries Insiders Aligned With All Shareholders?

It makes me feel more secure owning shares in a company if insiders also own shares, thusly more closely aligning our interests. As a result, I'm encouraged by the fact that insiders own ABM Industries shares worth a considerable sum. Indeed, they hold US$20m worth of its stock. That's a lot of money, and no small incentive to work hard. Even though that's only about 0.7% of the company, it's enough money to indicate alignment between the leaders of the business and ordinary shareholders.

Is ABM Industries Worth Keeping An Eye On?

As I already mentioned, ABM Industries is a growing business, which is what I like to see. Just as polish makes silverware pop, the high level of insider ownership enhances my enthusiasm for this growth. That combination appeals to me, for one. So yes, I do think the stock is worth keeping an eye on. Even so, be aware that ABM Industries is showing 2 warning signs in our investment analysis , you should know about...

Although ABM Industries certainly looks good to me, I would like it more if insiders were buying up shares. If you like to see insider buying, too, then this free list of growing companies that insiders are buying, could be exactly what you're looking for.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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