Here's Why We Think Bristol-Myers Squibb (NYSE:BMY) Might Deserve Your Attention Today

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 currently lacks a track record of revenue and 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.

In contrast to all that, many investors prefer to focus on companies like Bristol-Myers Squibb (NYSE:BMY), which has not only revenues, but also profits. Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Bristol-Myers Squibb with the means to add long-term value to shareholders.

Check out our latest analysis for Bristol-Myers Squibb

How Fast Is Bristol-Myers Squibb Growing Its Earnings Per Share?

In the last three years Bristol-Myers Squibb's earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. Thus, it makes sense to focus on more recent growth rates, instead. Bristol-Myers Squibb's EPS skyrocketed from US$3.04 to US$3.81, in just one year; a result that's bound to bring a smile to shareholders. That's a impressive gain of 25%.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. To cut to the chase Bristol-Myers Squibb's EBIT margins dropped last year, and so did its revenue. Shareholders will be hoping for a change in fortunes if they're looking for profit growth.

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

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

Are Bristol-Myers Squibb Insiders Aligned With All Shareholders?

Since Bristol-Myers Squibb has a market capitalisation of US$125b, we wouldn't expect insiders to hold a large percentage of shares. But we do take comfort from the fact that they are investors in the company. Holding US$77m worth of stock in the company is no laughing matter and insiders will be committed in delivering the best outcomes for shareholders. This should keep them focused on creating long term value for shareholders.

Is Bristol-Myers Squibb Worth Keeping An Eye On?

If you believe that share price follows earnings per share you should definitely be delving further into Bristol-Myers Squibb's strong EPS growth. Further, the high level of insider ownership is impressive and suggests that the management appreciates the EPS growth and has faith in Bristol-Myers Squibb'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. Still, you should learn about the 2 warning signs we've spotted with Bristol-Myers Squibb.

Although Bristol-Myers Squibb certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see insider buying, then this free list of growing companies that insiders are buying, could be exactly what you're looking for.

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.