December 2, 2021

Remarkable Mate

Remarkable business & finance

With EPS Growth And More, AptarGroup (NYSE:ATR) Is Interesting

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.’

If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in AptarGroup (NYSE:ATR). While profit is not necessarily a social good, it’s easy to admire a business that can consistently produce it. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.

AptarGroup’s Improving Profits

Even modest earnings per share growth (EPS) can create meaningful value, when it is sustained reliably from year to year. So it’s no surprise that some investors are more inclined to invest in profitable businesses. AptarGroup boosted its trailing twelve month EPS from US$3.16 to US$3.88, in the last year. I doubt many would complain about that 23% gain.

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 AptarGroup’s EBIT margins were flat over the last year, revenue grew by a solid 11% to US$3.1b. That’s a real positive.

In the chart below, you can see how the company has grown earnings, and revenue, over time. To see the actual numbers, click on the chart.

NYSE:ATR Earnings and Revenue History October 21st 2021

The trick, as an investor, is to find companies that are going to perform well in the future, not just in the past. To that end, right now and today, you can check our visualization of consensus analyst forecasts for future AptarGroup EPS 100% free.

Are AptarGroup Insiders Aligned With All Shareholders?

We would not expect to see insiders owning a large percentage of a US$8.5b company like AptarGroup. But we do take comfort from the fact that they are investors in the company. With a whopping US$51m worth of shares as a group, insiders have plenty riding on the company’s success. That’s certainly enough to make me think that management will be very focussed on long term growth.

Does AptarGroup Deserve A Spot On Your Watchlist?

As I already mentioned, AptarGroup is a growing business, which is what I like to see. Just as polish makes silverware pop, the high level of insider ownership enhances my enthusiasm for this growth. That combination appeals to me, for one. So yes, I do think the stock is worth keeping an eye on. You should always think about risks though. Case in point, we’ve spotted 2 warning signs for AptarGroup you should be aware of.

You can invest in any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies 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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

https://www.nasdaq.com/articles/with-eps-growth-and-more-aptargroup-nyse%3Aatr-is-interesting-2021-10-21