Should You Be Adding Victory Capital Holdings (NASDAQ:VCTR) To Your Watchlist Today?

Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Victory Capital Holdings (NASDAQ:VCTR). 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.

See our latest analysis for Victory Capital Holdings

Victory Capital Holdings' Improving Profits

Victory Capital Holdings 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. So it would be better to isolate the growth rate over the last year for our analysis. In previous twelve months, Victory Capital Holdings' EPS has risen from US$3.89 to US$4.28. That amounts to a small improvement of 9.9%.

It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. Victory Capital Holdings maintained stable EBIT margins over the last year, all while growing revenue 2.4% to US$882m. That's a real positive.

The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.

The trick, as an investor, is to find companies that are going to perform well in the future, not just in the past. While crystal balls don't exist, you can check our visualization of consensus analyst forecasts for Victory Capital Holdings' future EPS 100% free.

Are Victory Capital Holdings Insiders Aligned With All Shareholders?

Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. Of course, we can never be sure what insiders are thinking, we can only judge their actions.

The real kicker here is that Victory Capital Holdings insiders spent a staggering US$2.1m on acquiring shares in just one year, without single share being sold in the meantime. The shareholders within the general public should find themselves expectant and certainly hopeful, that this large outlay signals prescient optimism for the business. Zooming in, we can see that the biggest insider purchase was by Chairman of the Board of Directors & CEO David Brown for US$1.6m worth of shares, at about US$27.01 per share.

On top of the insider buying, it's good to see that Victory Capital Holdings insiders have a valuable investment in the business. We note that their impressive stake in the company is worth US$181m. This suggests that leadership will be very mindful of shareholders' interests when making decisions!

Is Victory Capital Holdings Worth Keeping An Eye On?

One positive for Victory Capital Holdings is that it is growing EPS. That's nice to see. 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 4 warning signs for Victory Capital Holdings (1 is a bit concerning!) that we have uncovered.

The good news is that Victory Capital 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.