With EPS growth and more, MSCI (NYSE:MSCI) is an interesting argument

Investors are often drawn to the idea of ​​discovering “the next big thing,” even if that means buying “story stocks” without generating revenue or even profit. Unfortunately, the likelihood of these high-risk investments ever paying off is often very low, and many investors are learning their lesson. Loss-making companies can act like a sponge that soaks up capital, so investors should be careful not to throw good money after bad.

If this idea of ​​high risk and high return does not appeal to you, you may be more interested in profitable, growing companies like MSCI (NYSE:MSCI). Even if this company is fairly valued by the market, investors agree that MSCI still has the opportunity to increase value for shareholders over the long term by generating consistent earnings.

Check out our latest analysis for MSCI

How quickly does MSCI increase earnings per share?

The market is a voting machine in the short term, but a weighing machine in the long term, so you would expect the share price to ultimately follow earnings per share (EPS) results. This means that EPS growth is viewed as a real positive by most successful long-term investors. Impressively, MSCI has grown EPS by 21% per year over the past three years. As a general rule, we would say that if a company can keep up The Kind of growth, shareholders will be beaming.

One way to check a company's growth is to look at how its revenue and earnings before interest and taxes (EBIT) are changing. MSCI was able to keep its EBIT margins stable last year while increasing revenue by 15% to $2.7 billion. This is encouraging news for the company!

In the graph below you can see how the company has grown profit and revenue over time. Click on the graph to see the exact numbers.

You don’t drive with your eyes in the rearview mirror, so you might be more interested in the free Report with analyst forecasts for MSCI's Future profits.

Are MSCI insiders on the same page as all shareholders?

They say where there's smoke, there's fire. For investors, insider buying is often the smoke that indicates which stocks could rock the market. That's because insider buying is often an indication that those closest to the company have confidence that the stock price will perform well. However, sometimes insiders are wrong, and we don't know the exact reasoning behind their purchases.

We note that insiders have sold $5.0 million worth of shares in the last year. However, that is far less than the $9.5 million insiders have spent buying shares. This increases interest in MSCI because it suggests that those who understand the company best are bullish. We also note that it was Chairman and CEO Henry Fernandez who made the largest single acquisition, paying $6.1 million for shares at a price of about $470 apiece.

The story continues

The good news for MSCI bulls, besides insider buying, is that insiders (collectively) have a significant investment in the stock. We note that their impressive stake in the company is worth $1.4 billion. This suggests that the company's management will keep shareholders' interests very much in mind when making decisions!

Is it worth keeping an eye on MSCI?

There's no denying that MSCI has been growing its earnings per share at a very impressive rate. That's attractive. In addition, we can see that insiders both own a lot of shares in the company and are buying more. With these things in mind, this is a stock worth watching. Don't forget that there may still be risks. For example, we've identified: 1 warning signal for MSCI that you should know.

There are plenty of other companies whose stocks are being snapped up by insiders, so if you like MSCI, you'll probably love this curated collection of U.S. companies that have attractive valuations and have been bought by insiders over the past three months.

Please note that the insider transactions discussed in this article are reportable transactions in the respective jurisdiction.

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This Simply Wall St article is of a general nature. We comment solely on the basis of historical data and analyst forecasts, using an unbiased methodology. Our articles do not constitute financial advice. It is not a recommendation to buy or sell any stock and does not take into account your objectives or financial situation. Our goal is to provide you with long-term analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or qualitative materials. Simply Wall St does not hold any of the stocks mentioned.