I Built A List Of Growing Companies And Artisan Partners Asset Management (NYSE:APAM) Made The Cut

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. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.

In contrast to all that, I prefer to spend time on companies like Artisan Partners Asset Management (NYSE:APAM), which has not only revenues, but also profits. Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. In comparison, loss making companies act like a sponge for capital - but unlike such a sponge they do not always produce something when squeezed.

Check out our latest analysis for Artisan Partners Asset Management

How Fast Is Artisan Partners Asset Management Growing?

As one of my mentors once told me, share price follows earnings per share (EPS). That makes EPS growth an attractive quality for any company. It certainly is nice to see that Artisan Partners Asset Management has managed to grow EPS by 19% per year over three years. If the company can sustain that sort of growth, we'd expect shareholders to come away winners.

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. Artisan Partners Asset Management maintained stable EBIT margins over the last year, all while growing revenue 23% to US$1.2b. That's progress.

The chart below shows how the company's bottom and top lines have progressed over time. Click on the chart to see the exact numbers.

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

Are Artisan Partners Asset Management 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 did see some selling in the last twelve months, but that's insignificant compared to the whopping US$10.0m that the Independent Director, Tench Coxe spent acquiring shares. We should note the average purchase price was around US$45.39. The quantum of that insider purchase is both rare and a sight to behold, not unlike an endangered Amur Leopard in the wild.

On top of the insider buying, it's good to see that Artisan Partners Asset Management insiders have a valuable investment in the business. Given insiders own a small fortune of shares, currently valued at US$81m, they have plenty of motivation to push the business to succeed. This should keep them focused on creating long term value for shareholders.

Does Artisan Partners Asset Management Deserve A Spot On Your Watchlist?

For growth investors like me, Artisan Partners Asset Management's raw rate of earnings growth is a beacon in the night. Better still, insiders own a large chunk of the company and one has even been buying more shares. So it's fair to say I think this stock may well deserve a spot on your watchlist. However, before you get too excited we've discovered 2 warning signs for Artisan Partners Asset Management that you should be aware of.

As a growth investor I do like to see insider buying. But Artisan Partners Asset Management isn't the only one. You can see a 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.