Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit.  Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals.  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 Standex International (NYSE:SXI). Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.

How Fast Is Standex International Growing?

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow.  So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research.   To the delight of shareholders, Standex International has achieved impressive annual EPS growth of 52%, compound, over the last three years.  Growth that fast may well be fleeting, but it should be more than enough to pique the interest of the wary stock pickers.  

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.    It was a year of stability for Standex International as both revenue and EBIT margins remained have been flat over the past year.  That's not bad, but it doesn't point to ongoing future growth, either.  

The chart below shows how the company's bottom and top lines have progressed over time.  Click on the chart to see the exact numbers.

NYSE:SXI Earnings and Revenue History April 5th 2024

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 Standex International's future profits.

Are Standex International Insiders Aligned With All Shareholders?

It's a necessity that company leaders act in the best interest of shareholders and so insider investment always comes as a reassurance to the market.  Standex International followers will find comfort in knowing that insiders have a significant amount of capital that aligns their best interests with the wider shareholder group.     To be specific, they have US$38m worth of shares.  That shows significant buy-in, and may indicate conviction in the business strategy.   Despite being just 1.8% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.  

Is Standex International Worth Keeping An Eye On?

Standex International's earnings per share growth have been climbing higher at an appreciable rate.   This level of EPS growth does wonders for attracting investment, and the large insider investment in the company is just the cherry on top.  The hope is, of course, that the strong growth marks a fundamental improvement in the business economics.  So at the surface level, Standex International is worth putting on your watchlist; after all, shareholders do well when the market underestimates fast growing companies.     We don't want to rain on the parade too much, but we did also find 3 warning signs for Standex International (1 is concerning!) that you need to be mindful of.  

There's always the possibility of doing well buying stocks that are not growing earnings and do not have insiders buying shares. But for those who consider these important metrics, we encourage you to check out companies that do have those features. You can access a tailored list of  companies which have demonstrated growth backed by recent insider purchases.

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.