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Yahoo
4 days ago
- Business
- Yahoo
Here's Why We Think Auction Technology Group (LON:ATG) Might Deserve Your Attention Today
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. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' 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 Auction Technology Group (LON:ATG), which has not only revenues, but also profits. 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. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. Auction Technology Group's Improving Profits In the last three years Auction Technology Group'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. Impressively, Auction Technology Group's EPS catapulted from US$0.11 to US$0.21, over the last year. It's a rarity to see 82% year-on-year growth like that. 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. Despite the relatively flat revenue figures, shareholders will be pleased to see EBIT margins have grown from 17% to 21% in the last 12 months. That's something to smile about. In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image. Check out our latest analysis for Auction Technology Group Fortunately, we've got access to analyst forecasts of Auction Technology Group's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting. Are Auction Technology Group Insiders Aligned With All Shareholders? It's pleasing to see company leaders with putting their money on the line, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. Auction Technology Group followers will find comfort in knowing that insiders have a significant amount of capital that aligns their best interests with the wider shareholder group. As a matter of fact, their holding is valued at US$17m. That's a lot of money, and no small incentive to work hard. Despite being just 2.9% of the company, the value of that investment is enough to show insiders have plenty riding on the venture. Should You Add Auction Technology Group To Your Watchlist? Auction Technology Group's earnings have taken off in quite an impressive fashion. That EPS growth certainly is attention grabbing, and the large insider ownership only serves to further stoke our interest. At times fast EPS growth is a sign the business has reached an inflection point, so there's a potential opportunity to be had here. So at the surface level, Auction Technology Group is worth putting on your watchlist; after all, shareholders do well when the market underestimates fast growing companies. Now, you could try to make up your mind on Auction Technology Group by focusing on just these factors, or you could also consider how its price-to-earnings ratio compares to other companies in its industry. While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in GB with promising growth potential and insider confidence. Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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. Sign in to access your portfolio
Mint
6 days ago
- Business
- Mint
Finology Research Desk never invests in these stocks? Here's why
Finology Research Desk has a clear view: Not every stock deserves a place in your portfolio. Plenty of them look great at first - rapid growth, big promises, glowing media coverage. But take a closer look, and warning signs start to show. These stocks can quietly hurt your returns over the long run. That's why picking the right stocks isn't just about spotting winners. It's also about knowing what to avoid, and why. So we've built our rulebook: a clear, no-compromise principle of what not to own. Here's what we deliberately avoid and why: We stay away from companies that try to lead in every sector. When promoters believe they can do everything, they usually end up losing focus. Legendary investor Peter Lynch warned against this kind of over-diversification; he called it 'diworsification.' It's the opposite of smart diversification. Instead of reducing risk, it adds complexity, misallocates capital, and weakens the core business. Such companies are hard to analyse, and even harder to predict. As investors, we prefer clarity and focus. So if a business keeps changing strategies, jumping into unrelated sectors, or shifting direction too often, it signals a lack of clarity. In Finology 30, we pick focused businesses that lead in their sector. The result is clear: true portfolio-level diversification, built by choosing one strong, sector-leading company at a time. Amtek Group is a classic example. Once a strong auto parts player, it lost direction in 2014 by acquiring Barista Coffee for ₹ 100 crore through its subsidiary, a move that made no strategic sense. At that time, Amtek was already struggling with debt, which had climbed from ₹ 15,000 crore in FY13 to ₹ 17,600 crore in FY14. Instead of focusing on its core business, it poured money into a loss-making, unrelated venture. In 2015, the company defaulted on ₹ 800 crore worth of bonds and was forced to sell Barista and other assets to raise cash. By 2017, it went bankrupt, a direct result of rising debt and poor business focus. We prefer businesses with focused promoters who solve one problem well, without distractions. We avoid companies that aren't profitable. That doesn't mean every business must turn a profit from day one. Taking a few years is fine; there may be valid reasons, like heavy upfront investment or the need to reach scale in a low-margin industry. But lately, chasing growth without a clear path to profits has become the norm. We believe in doing business the Zerodha or Zoho way: build with your capital, borrow less, and grow through real profits. Sure, some businesses genuinely need heavy capital and have to raise funds; that's fair. But with over 5,000 listed companies to choose from for Finology 30, we don't compromise. We focus only on businesses that are profitable, use customer money to grow, and can stand on their own. That's how we find 30 companies worth owning with confidence. And even if a company is profitable, we avoid it if it can't fund its operations. United Phosphorus Limited (UPL) is a classic example. In FY24, its profit dropped 60%, ending the year with a loss of ₹ 1,878 crore. EBITDA margins fell from 19% to 10%, and cash flows dried up. By December 2024, it had to raise ₹ 3,378 crore through a rights issue to repay its debt, which stood at ₹ 23,939 crore in FY23. Despite years of reported profits, the business couldn't sustain itself. High debt and rising costs kept draining cash. That's exactly the kind of risk we stay away from. We strictly avoid public sector undertakings. While the government's role in sectors like healthcare, education, and law and order is critical, its involvement in running commercial enterprises such as airlines or a large number of banks may not always align with long-term economic efficiency. We believe that one or two public banks are enough to ensure system stability. But when there are over 12, banks like SBI and Bank of Baroda end up competing with each other, instead of making the system stronger. We stay away from companies that raise money every few months through FPOs, rights issues, or QIPs. Frequent fundraising is a red flag, as it usually means the company is short on cash or its core business isn't strong enough to fund growth on its own. And here's the bigger problem: every time they issue new shares, existing shareholders get diluted. Even if profits grow later, earnings per share stay low because those profits are spread across too many shares. We prefer businesses that fund growth through internal cash flows. In those cases, profits aren't just earned, they're reinvested into the business, keeping it self-reliant. Over time, consistent cash generation can even allow these companies to buy back shares, reducing the total share count. That means future profits are shared among fewer shareholders, which pushes up earnings per share and shows the company is focused on real value creation, not just growth for the sake of it. We avoid companies that depend heavily on government contracts, where most of their revenue comes from B2G. In sectors like railways and infrastructure, the government is the dominant buyer. Multiple companies bid aggressively for the same order, leaving all the pricing power with the government. On paper, these contracts may look lucrative. But the reality is different, margins are thin, payments are delayed for months, and a single policy change can throw everything off balance. And it's not just limited to government-facing businesses. The same problem shows up in any industry with too many sellers and too few buyers. In these situations, suppliers are stuck cutting costs, working with thin margins, and unable to raise prices. That's not the kind of company we want to invest in. We stay away from companies that chase growth at any cost. These are the ones that want to be everywhere: food delivery, quick commerce, AI, logistics, you name it. But when you ask about net profit, they brush it off, because they've never made any. Instead, they point to EBITDA or operating profit. These numbers look better because they leave out key expenses like interest, depreciation, and taxes. It gives a false impression that the company is profitable when, in reality, it's not. A few quarters later, when you ask again, they announce a new category where they plan to invest heavily for the next couple of years. And when questioned, they defend it by saying: 'If we weren't entering new segments, our older ones would have been profitable.' But those profits never show up. The reality is, no company can win in every segment. One wrong move can undo years of progress. We'd rather invest in companies that lead in one segment, stay focused, and expand with clarity. We avoid companies run by promoters with a political background. These businesses often grow quickly when their party is in power, thanks to easy contracts and fast-track approvals. But that growth usually comes at a cost: under-the-table deals, misused influence and unfair advantages. And once the ruling party changes, the support vanishes, projects get delayed, and investigations often begin into how those contracts were awarded. Political ties might fast-track growth for a while, but it's usually short-lived and often built on corruption. And that's the real concern. That's not a risk we're willing to take. Markets are full of noise, big promises, flashy numbers, and constant hype. Investing is an art, and while some of these companies might still deliver returns, we are not willing to put your money at unnecessary risk. That's why we built Finology 30, a basket of 30 stocks built for investors who believe in long-term wealth creation and value a focused approach. These stocks are selected through rigorous filters that prioritise business quality, management integrity, and valuation discipline to appreciate and protect your capital. Finology is a SEBI-registered investment advisor firm with registration number: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
Yahoo
15-07-2025
- Business
- Yahoo
Why You Should Be Investing in Coca-Cola, Home Depot and 6 More of Your Favorite Brands
It may not even occur to you as you go shopping, but many of the brands that you know and love are actually publicly traded companies. This means you can invest in their stocks on the open market and participate in their success. But does it make financial sense to invest in companies just because you use their products? Here are some of the reasons why you may want to consider investing in the stocks of your favorite brands. For You: Read Next: Famous investors from Peter Lynch to Warren Buffett have touted the idea for decades that you should invest in what you know. If you're an avid Costco shopper, for example, you likely know very well how the store operates, what products it offers and how its customer service and product quality match up to its competitors. If you can remove emotion from the equation and analyze these facts objectively, you could have a leg up when determining whether or not a company is a good investment. Discover Next: When you buy a company's stock, you become a part-owner. Granted, the percentage of the company you will own, even with a big purchase, is minuscule, but you still participate in the success of the stock the same as any institutional investor. When you spend money at your favorite store, you're directly contributing to your own success by generating sales. The same is true if you refer all your friends and they become customers also. Some companies reward their shareholders with various perks. Royal Caribbean, Carnival and Norwegian Cruise Line, for example, offer their shareholders onboard credit for owning at least 100 shares, according to Tiicker. Whirlpool offers shareholders a 30% discount with the purchase of just one share. And Berkshire Hathaway not only grants access to its annual shareholder meeting, which is a globally televised, two-day event that fills a sports arena, but it also gives 8% off a Geico insurance plan if you own a single share. Most well-known, established brands pay cash dividends to shareholders as a way of distributing their profits. If you're a fan of cash-back credit cards, buying stocks that pay a dividend should be right up your alley. The S&P 500 index, which consists of the 500 largest companies in America, currently pays a dividend yield of 1.25%, but some popular brands, like Pepsi, pay as much as 4.31%, according to Yahoo Finance. That's more than you could earn from most government bonds and high-yield savings accounts and it doesn't even factor in the capital appreciation potential of the stock. Here are some of the most well-known, beloved companies in America that you could consider investing in. As always, do your own homework and make sure that a company matches your investment objectives and risk tolerance before committing any money. Each stock's details were sourced from Yahoo Financial. Stock price as of July 9, 2025: $69.48 YTD performance: 13.22% 5-year performance: 84.14% Dividend yield: 2.88% One-year analyst price target: $77.83 Stock price as of July 9, 2025: $134.48 YTD performance: -9.80% 5-year performance: 17.62% Dividend yield: 4.31% One-year analyst price target: $149.15 Stock price as of July 9, 2025: $371.04 YTD performance: -3.41% 5-year performance: 68.78% Dividend yield: 2.51% One-year analyst price target: $418.64 Stock price as of July 9, 2025: $211.14 YTD performance: -15.48% 5-year performance: 126.84% Dividend yield: 0.51% One-year analyst price target: $228.60 Stock price as of July 9, 2025: $503.51 YTD performance: 19.92% 5-year performance: 145.21% Dividend yield: 0.67% One-year analyst price target: $522.26 Stock price as of July 9, 2025: $222.54 YTD performance: 1.44% 5-year performance: 39.85% Dividend yield: N/A One-year analyst price target: $241.82 Stock price as of July 9, 2025: $96.81 YTD performance: 7.70% 5-year performance: 144.15% Dividend yield: 0.96% One-year analyst price target: $108.95 Stock price as of July 9, 2025: $982.09 YTD performance: 7.44% 5-year performance: 227.61% Dividend yield: 0.53% One-year analyst price target: $1,056.36 No stock is going to perform better simply because you own its shares. But investing in companies that you like can still pay dividends, literally and figuratively. In addition to feeling like you're part of the company that you shop at, when you're interested in investing, you're more likely to stick with it. And the longer you remain invested in the stock market, the more likely you are to enjoy long-term success. Just remember that even the best company isn't immune to the business cycle and will have its inevitable ups and downs. This is why a balanced, diversified portfolio can be a great way to reduce your risk while still maintaining your long-term upside. More From GOBankingRates 10 Unreliable SUVs To Stay Away From Buying This article originally appeared on Why You Should Be Investing in Coca-Cola, Home Depot and 6 More of Your Favorite Brands Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
13-07-2025
- Business
- Yahoo
Here's Why We Think HEICO (NYSE:HEI) Might Deserve Your Attention Today
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 currently 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.' 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. 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 HEICO (NYSE:HEI). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it. Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit. The market is a voting machine in the short term, but a weighing machine in the long term, so you'd expect share price to follow earnings per share (EPS) outcomes eventually. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. It certainly is nice to see that HEICO has managed to grow EPS by 20% per year over three years. As a result, we can understand why the stock trades on a high multiple of trailing twelve month earnings. 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. HEICO maintained stable EBIT margins over the last year, all while growing revenue 18% to US$4.1b. That's progress. You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers. View our latest analysis for HEICO The trick, as an investor, is to find companies that are going to perform well in the future, not just in the past. While crystal balls don't exist, you can check our visualization of consensus analyst forecasts for HEICO's future EPS 100% free. Owing to the size of HEICO, we wouldn't expect insiders to hold a significant proportion of the company. But thanks to their investment in the company, it's pleasing to see that there are still incentives to align their actions with the shareholders. Indeed, they have a considerable amount of wealth invested in it, currently valued at US$5.3b. That equates to 14% of the company, making insiders powerful and aligned with other shareholders. So there is opportunity here to invest in a company whose management have tangible incentives to deliver. It means a lot to see insiders invested in the business, but shareholders may be wondering if remuneration policies are in their best interest. Well, based on the CEO pay, you'd argue that they are indeed. Our analysis has discovered that the median total compensation for the CEOs of companies like HEICO, with market caps over US$8.0b, is about US$14m. The HEICO CEO received total compensation of just US$6.6m in the year to October 2024. First impressions seem to indicate a compensation policy that is favourable to shareholders. CEO remuneration levels are not the most important metric for investors, but when the pay is modest, that does support enhanced alignment between the CEO and the ordinary shareholders. Generally, arguments can be made that reasonable pay levels attest to good decision-making. If you believe that share price follows earnings per share you should definitely be delving further into HEICO's strong EPS growth. If that's not enough, consider also that the CEO pay is quite reasonable, and insiders are well-invested alongside other shareholders. Everyone has their own preferences when it comes to investing but it definitely makes HEICO look rather interesting indeed. It is worth noting though that we have found 2 warning signs for HEICO that you need to take into consideration. Although HEICO certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with more skin in the game, then check out this handpicked selection of companies that not only boast of strong growth but have strong insider backing. Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) 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. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Mint
12-07-2025
- Business
- Mint
How index-fund investing turned into an extreme sport
Peter Lynch, the former portfolio manager of Fidelity Magellan Fund, has long warned investors against what he calls diworsification: cluttering a portfolio with too many investments. I think many investors should worry instead about deversification. That's the opposite of diversification. Rather than spreading your bets, you concentrate them—and that can be dangerous. Deversification is sweeping through the world of exchange-traded funds. Investing in an ETF that tracks only a few stocks—or even just one—is a lot more exciting than holding an index fund that owns every stock in the market. It's also a lot riskier. Back in 1998, according to Daniel Sotiroff, a senior analyst at Morningstar, 85% of stock-index funds were weighted by capitalization. The biggest stocks had the heaviest representation, as in the S&P 500. By the end of 2024, only 40% of index funds were capitalization weighted. The median, or typical, index fund held 503 stocks in 1998, Sotiroff found. By May 2025, that had shrunk to 123 stocks. The more recently an ETF launched, the fewer stocks it tends to own. 'A lot of newer investments are taking on more risk than investors may realize," Sotiroff says. The irony is that many people worry about how concentrated the S&P 500 is in only a handful of huge tech companies. They then turn around and concentrate their own portfolios in an even riskier handful of stocks. Let's be clear: Bundling a limited number of stocks inside an ETF doesn't make them safe. The fewer stocks you hold, and the farther away from the overall market you move, the more extreme your returns are likely to become. Your potential gains are greater, but so are your losses. Between 1985 and 2024, the average stock suffered a maximum interim decline of 81%, and more than half never regained their previous highs, according to analysts Michael Mauboussin and Dan Callahan of Morgan Stanley. What's driving the wave of deversification? Fund managers want to earn higher fees than the pittance they can make running an S&P 500 or total stock-market index fund. And many investors are chasing higher returns—and more excitement than they can get from a traditional index fund—by focusing their bets and taking bigger risks. We now have ETFs that capture the returns of heating, ventilation and air-conditioning stocks; own convertible bonds issued by companies that hold bitcoin in their corporate treasury; use borrowed money to buy already leveraged loans; follow an index of small-to-midsize uranium stocks; track the future cost of transporting crude oil by sea; and replicate the performance of Icelandic stocks. Although some are actively managed, many charge fees 20 to 30 times higher than a traditional index fund. The ultimate in deversification is leveraged single-stock ETFs. They typically seek to double or triple the daily performance of only one stock. (A few aim to amplify the opposite of its return each day.) When these funds rolled out in 2022, they jacked up the returns of giants such as Apple, Microsoft or Tesla. 'Now we have gone far, far down the capitalization scale," says Todd Sohn, an analyst at Strategas Securities, 'toward much more volatile names." ETFs launched in the past couple months seek to double the daily returns of such tiny, hyper-risky stocks as electric-aircraft maker Archer Aviation, computing provider D-Wave Quantum, nuclear-power developer Oklo, voice-recognition company SoundHound AI and lending platform Upstart Holdings. In their brief lives, these funds have generated cumulative returns ranging from a 26% loss to a 226% gain. As of this month, more than 100 leveraged single-stock ETFs manage a total of more than $23 billion. So far, those funds constitute only about 0.2% of total ETF assets, according to Sohn. But their average daily trading volume has more than doubled in the past year, to nearly $9 billion. They aren't the only deversification danger. ETFs that don't use leverage and are linked to narrow market segments rather than a single stock are risky, too. ETFs tracking indexes of cannabis stocks lost more than 90% between 2019 and 2023. ETFs following solar-stock indexes have fallen more than 70% at least three times. Index funds that use such factors as equal weighting (tilting toward smaller stocks) or momentum (rapid price appreciation) have suffered deeper drops than the overall market. Nevertheless, money keeps pouring into quirkier index funds. Last year, $132 billion went into non-market-capitalization-weighted index funds, according to Morningstar. Another $25 billion flowed in during the first five months of 2025. When you buy a narrowly focused ETF, you're making an active bet on the direction of a particular market or asset. You've become deversified. And that can easily turn into speculation. Unlike many other pleasures, speculation isn't illegal, immoral or even fattening. Speculating on stocks also beats the lottery or casino, where your odds are even worse. It can be educational, engaging and just plain fun—for as long as the profits last. But it's putting you at risk. In fact, the more fun speculation feels, the more likely the profits are about to fizzle. If you must speculate, bear a few things in mind. First, amplifying the risk of single stocks can make you a ton of money when the market is going up. It will wipe you out when the market goes down. Limit your bets to a maximum of, say, 5% of your total assets. That way, you'll make a lot if you bet right but can't wreck your financial future if you turn out to be wrong. Finally, don't fall for the delusion that an ETF owning some but not all of the market is diversified. It's deversified.
