Is Now The Time To Put Arthur J. Gallagher (NYSE:AJG) On Your Watchlist?

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 the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Arthur J. Gallagher (NYSE:AJG). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Arthur J. Gallagher with the means to add long-term value to shareholders.

See our latest analysis for Arthur J. Gallagher

How Quickly Is Arthur J. Gallagher Increasing Earnings Per Share?

If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS) outcomes. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Over the last three years, Arthur J. Gallagher has grown EPS by 13% per year. That growth rate is fairly good, assuming the company can keep it up.

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. Arthur J. Gallagher shareholders can take confidence from the fact that EBIT margins are up from 17% to 22%, and revenue is growing. Both of which are great metrics to check off for potential growth.

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.

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

Are Arthur J. Gallagher Insiders Aligned With All Shareholders?

We would not expect to see insiders owning a large percentage of a US$39b company like Arthur J. Gallagher. But we are reassured by the fact they have invested in the company. Notably, they have an enviable stake in the company, worth US$447m. This suggests that leadership will be very mindful of shareholders' interests when making decisions!

Should You Add Arthur J. Gallagher To Your Watchlist?

One important encouraging feature of Arthur J. Gallagher is that it is growing profits. For those who are looking for a little more than this, the high level of insider ownership enhances our enthusiasm for this growth. These two factors are a huge highlight for the company which should be a strong contender your watchlists. It is worth noting though that we have found 3 warning signs for Arthur J. Gallagher that you need to take into consideration.

The beauty of investing is that you can invest in almost any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies 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.