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The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.
In contrast to all that, many investors prefer to focus on companies like ArcelorMittal (AMS:MT), which has not only revenues, but also profits. While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.
View our latest analysis for ArcelorMittal
How Fast Is ArcelorMittal Growing Its Earnings Per Share?
In the last three years ArcelorMittal's earnings per share took off; so much so that it's a bit disingenuous to use these figures to try and deduce long term estimates. As a result, we'll zoom in on growth over the last year, instead. ArcelorMittal's EPS skyrocketed from US$10.44 to US$16.04, in just one year; a result that's bound to bring a smile to shareholders. That's a commendable gain of 54%.
One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. On the revenue front, ArcelorMittal has done well over the past year, growing revenue by 20% to US$84b but EBIT margin figures were less stellar, seeing a decline over the last 12 months. So it seems the future may hold further growth, especially if EBIT margins can remain steady.
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.
While we live in the present moment, there's little doubt that the future matters most in the investment decision process. So why not check this interactive chart depicting future EPS estimates, for ArcelorMittal?
Are ArcelorMittal Insiders Aligned With All Shareholders?
We would not expect to see insiders owning a large percentage of a €21b company like ArcelorMittal. But we are reassured by the fact they have invested in the company. To be specific, they have US$11m worth of shares. This considerable investment should help drive long-term value in the business. Despite being just 0.05% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.