NASDAQ:INTC). While profit is not necessarily a social good, it’s easy to admire a business that can consistently produce it. While a well funded company may sustain losses for years, unless its owners have an endless appetite for subsidizing the customer, it will need to generate a profit eventually, or else breathe its last breath.” data-reactid=”29″>In the age of tech-stock blue-sky investing, my choice may seem old fashioned; I still prefer profitable companies like Intel (NASDAQ:INTC). While profit is not necessarily a social good, it’s easy to admire a business that can consistently produce it. While a well funded company may sustain losses for years, unless its owners have an endless appetite for subsidizing the customer, it will need to generate a profit eventually, or else breathe its last breath.
Check out our latest analysis for Intel ” data-reactid=”30″> Check out our latest analysis for Intel
How Fast Is Intel Growing?
If a company can keep growing earnings per share (EPS) long enough, its share price will eventually follow. That makes EPS growth an attractive quality for any company. It certainly is nice to see that Intel has managed to grow EPS by 27% per year over three years. If the company can sustain that sort of growth, we’d expect shareholders to come away winners.
I like to see top-line growth as an indication that growth is sustainable, and I look for a high earnings before interest and taxation (EBIT) margin to point to a competitive moat (though some companies with low margins also have moats). Intel maintained stable EBIT margins over the last year, all while growing revenue 12% to US$79b. That’s a real positive.
The chart below shows how the company’s bottom and top lines have progressed over time. For finer detail, click on the image.
report showing analyst forecasts for Intel’s future profits.” data-reactid=”51″>You don’t drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for Intel’s future profits.
Are Intel Insiders Aligned With All Shareholders?
Like the kids in the streets standing up for their beliefs, insider share purchases give me reason to believe in a brighter future. 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.
Although we did see some insider selling (worth -US$2.8m) this was overshadowed by a mountain of buying, totalling US$11m in just one year. This makes me even more interested in Intel because it suggests that those who understand the company best, are optimistic. We also note that it was the Independent Director, James Goetz, who made the biggest single acquisition, paying US$5.0m for shares at about US$58.25 each.
On top of the insider buying, it’s good to see that Intel insiders have a valuable investment in the business. Given insiders own a small fortune of shares, currently valued at US$86m, they have plenty of motivation to push the business to succeed. This should keep them focused on creating long term value for shareholders.
Should You Add Intel To Your Watchlist?
2 warning signs for Intel that you should be aware of.” data-reactid=”57″>For growth investors like me, Intel’s raw rate of earnings growth is a beacon in the night. Not only that, but we can see that insiders both own a lot of, and are buying more, shares in the company. 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 2 warning signs for Intel that you should be aware of.
a list of them… with insider buying in the last three months!” data-reactid=”62″>The good news is that Intel is not the only growth stock with insider buying. Here’s a list of them… with insider buying in the last three months!
Get in touch with us directly. Alternatively, email [email protected].” data-reactid=”64″>This article by Simply Wall St is general in nature. 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.