Here's Why I Think Ball (NYSE:BLL) Might Deserve Your Attention Today

By
Simply Wall St
Published
December 19, 2021
NYSE:BALL
Source: Shutterstock

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it completely lacks a track record of revenue and profit. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.'

In contrast to all that, I prefer to spend time on companies like Ball (NYSE:BLL), which has not only revenues, but also profits. While profit is not necessarily a social good, it's easy to admire a business that can consistently produce it. Loss-making companies are always racing against time to reach financial sustainability, but time is often a friend of the profitable company, especially if it is growing.

View our latest analysis for Ball

How Quickly Is Ball 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). It's no surprise, then, that I like to invest in companies with EPS growth. It certainly is nice to see that Ball has managed to grow EPS by 23% per year over three years. As a general rule, we'd say that if a company can keep up that sort of growth, shareholders will be smiling.

I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. While we note Ball's EBIT margins were flat over the last year, revenue grew by a solid 16% to US$13b. That's progress.

The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.

earnings-and-revenue-history
NYSE:BLL Earnings and Revenue History December 19th 2021

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

Are Ball 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. Of course, we can never be sure what insiders are thinking, we can only judge their actions.

We do note that, in the last year, insiders sold -US$100k worth of shares. But that's far less than the US$4.1m insiders spend purchasing stock. This makes me even more interested in Ball because it suggests that those who understand the company best, are optimistic. It is also worth noting that it was President & Director Daniel Fisher who made the biggest single purchase, worth US$939k, paying US$93.89 per share.

On top of the insider buying, it's good to see that Ball insiders have a valuable investment in the business. Indeed, they have a glittering mountain of wealth invested in it, currently valued at US$206m. This suggests to me that leadership will be very mindful of shareholders' interests when making decisions!

Should You Add Ball To Your Watchlist?

For growth investors like me, Ball's raw rate of earnings growth is a beacon in the night. On top of that, insiders own a significant stake in the company and have been buying more shares. So it's fair to say I think this stock may well deserve a spot on your watchlist. Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Ball that you should be aware of.

The good news is that Ball 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.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.