If EPS Growth Is Important To You, Bluegreen Vacations Holding (NYSE:BVH) Presents An Opportunity

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. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. 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 Bluegreen Vacations Holding (NYSE:BVH). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Bluegreen Vacations Holding with the means to add long-term value to shareholders.

See our latest analysis for Bluegreen Vacations Holding

Bluegreen Vacations Holding's Improving Profits

Bluegreen Vacations Holding has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. As a result, we'll zoom in on growth over the last year, instead. Bluegreen Vacations Holding's EPS shot up from US$2.69 to US$3.49; a result that's bound to keep shareholders happy. That's a fantastic gain of 29%.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. Not all of Bluegreen Vacations Holding's revenue this year is revenue from operations, so keep in mind the revenue and margin numbers used in this article might not be the best representation of the underlying business. While we note Bluegreen Vacations Holding achieved similar EBIT margins to last year, revenue grew by a solid 29% to US$906m. 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.

In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of Bluegreen Vacations Holding's forecast profits?

Are Bluegreen Vacations Holding Insiders Aligned With All Shareholders?

Many consider high insider ownership to be a strong sign of alignment between the leaders of a company and the ordinary shareholders. So those who are interested in Bluegreen Vacations Holding will be delighted to know that insiders have shown their belief, holding a large proportion of the company's shares. Actually, with 37% of the company to their names, insiders are profoundly invested in the business. Those who are comforted by solid insider ownership like this should be happy, as it implies that those running the business are genuinely motivated to create shareholder value. To give you an idea, the value of insiders' holdings in the business are valued at US$175m at the current share price. So there's plenty there to keep them focused!

Is Bluegreen Vacations Holding Worth Keeping An Eye On?

For growth investors, Bluegreen Vacations Holding's raw rate of earnings growth is a beacon in the night. Further, the high level of insider ownership is impressive and suggests that the management appreciates the EPS growth and has faith in Bluegreen Vacations Holding's continuing strength. Fast growth and confident insiders should be enough to warrant further research, so it would seem that it's a good stock to follow. Even so, be aware that Bluegreen Vacations Holding is showing 4 warning signs in our investment analysis , and 2 of those make us uncomfortable...

There's always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that do have those features. You can access a free list of them here.

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.