Should You Be Adding Manx Financial Group (LON:MFX) To Your Watchlist Today?

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17-02-2025

It's common for many investors, especially those who are inexperienced, to buy shares in companies with a good story even if these companies are loss-making. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. 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.
In contrast to all that, many investors prefer to focus on companies like Manx Financial Group (LON:MFX), which has not only revenues, but also profits. Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Manx Financial Group with the means to add long-term value to shareholders.
View our latest analysis for Manx Financial Group
Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. That means EPS growth is considered a real positive by most successful long-term investors. Recognition must be given to the that Manx Financial Group has grown EPS by 43% per year, over the last three years. While that sort of growth rate isn't sustainable for long, it certainly catches the eye of prospective investors.
Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. Not all of Manx Financial Group's revenue this year is revenue from operations, so keep in mind the revenue and margin numbers used in this article might not be the best representation of the underlying business. EBIT margins for Manx Financial Group remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 18% to UK£36m. That's encouraging news for the company!
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.
Since Manx Financial Group is no giant, with a market capitalisation of UK£17m, you should definitely check its cash and debt before getting too excited about its prospects.
It's said that there's no smoke without fire. For investors, insider buying is often the smoke that indicates which stocks could set the market alight. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, insiders are sometimes wrong, and we don't know the exact thinking behind their acquisitions.
The first bit of good news is that no Manx Financial Group insiders reported share sales in the last twelve months. But the important part is that CEO & Director Douglas Grant spent UK£245k buying stock, at an average price of UK£0.15. It seems at least one insider thinks that the company is doing well - and they are backing that view with cash.
And the insider buying isn't the only sign of alignment between shareholders and the board, since Manx Financial Group insiders own more than a third of the company. Owning 36% of the company, insiders have plenty riding on the performance of the the share price. Those who are comforted by solid insider ownership like this should be happy, as it implies that those running the business are genuinely motivated to create shareholder value. Although, with Manx Financial Group being valued at UK£17m, this is a small company we're talking about. That means insiders only have UK£6.3m worth of shares, despite the large proportional holding. This isn't an overly large holding but it should still keep the insiders motivated to deliver the best outcomes for shareholders.
Manx Financial Group's earnings per share growth have been climbing higher at an appreciable rate. To sweeten the deal, insiders have significant skin in the game with one even acquiring more. This quick rundown suggests that the business may be of good quality, and also at an inflection point, so maybe Manx Financial Group deserves timely attention. We don't want to rain on the parade too much, but we did also find 2 warning signs for Manx Financial Group that you need to be mindful of.
Keen growth investors love to see insider activity. Thankfully, Manx Financial Group isn't the only one. You can see a a curated list of British companies which have exhibited consistent growth accompanied by high insider ownership.
Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.
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