Here’s why Greencore Group (LON:GNC) has caught investors’ attention

For beginners, it may 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 profits. Sometimes these stories can cloud investors’ minds, leading them to invest with their emotions rather than based on the company’s sound fundamentals. A loss-making company has not yet proven itself in terms of profits and, eventually, the inflow of external capital may dry up.

If this type of business is not your style, and you like businesses that generate revenue, or even profits, then you may well be interested in Greencore Group (LON:GNC). Even though this company is fairly valued by the market, investors would agree that consistent profit generation will continue to provide Greencore Group with the means to add long-term shareholder value.

See our latest analysis for Greencore Group

How fast is Greencore Group growing its earnings per share?

Over the past three years, Greencore Group has grown its earnings per share (EPS) at such an impressive rate from a relatively low point, resulting in a three-year percentage growth rate that n is not particularly representative of expected future performances. So it would be better to isolate last year’s growth rate for our analysis. Greencore Group’s EPS increased from UK£0.062 to UK£0.078; a result which will not fail to satisfy shareholders. This represents an impressive gain of 26%.

Revenue growth is a great indicator of the sustainability of growth and, combined with a high earnings before interest and tax (EBIT) margin, it is a great way for a company to maintain a competitive edge in the market . Greencore Group has maintained stable EBIT margins over the last year, while increasing its turnover by 10% to £1.9 billion. This is a real positive point.

You can take a look at the company’s revenue and earnings growth trend in the chart below. For more details, click on the image.



In investing, as in life, the future matters more than the past. So why not check that out? free interactive visualization of Greencore Group activities forecast benefits?

Are Greencore Group insiders aligned with all shareholders?

Insider interest in a company always sparks a bit of intrigue, and many investors are looking for companies where insiders are putting their money where their mouth is. Because often, buying stocks is a sign that the buyer considers them undervalued. Of course, we can never be sure what the insiders think, we can only judge their actions.

Confidence in the company remains high among insiders as no shares have been sold by the company’s management or board members. But the real excitement comes from the UK£52,000 spent by Anne O’Leary, an independent non-executive director, to buy shares (at an average price of around UK£1.05). Purchases like this tell us the confidence management has in the company’s future.

Should you add Greencore Group to your watchlist?

If you believe that share price follows earnings per share, you should definitely dig deeper into Greencore Group’s strong EPS growth. The EPS growth isn’t the only striking feature, with company insiders adding to their holdings providing another notable vote of confidence for the company. To put it succinctly; Greencore Group is a strong candidate for your watchlist. Once you’ve identified a company you like, the next step is to determine what you think it’s worth. And now is your chance to view our exclusive Greencore Group discounted cash flow assessment. You might benefit from taking a look today.

Investors with a passion for growth love to see insider buying. Fortunately, Greencore Group is not alone. You can view a curated list of UK companies that have shown consistent growth accompanied by recent insider buying.

Please note that the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to constitute financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your objectives or your financial situation. Our goal is to provide you with targeted, long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.