Should You Add Meritage Homes (NYSE: MTH) to Your Watch List Today?

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<p class = "Canvas-Atom Canvas-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "It is only natural that many investors, especially those who are new to the game prefer to buy stocks of "sexy" stocks with a good history, even if these companies lose money, and in their study entitled Who falls victim to the Wall Street wolf? " Leuz et. al. found that it is "quite common" for investors to lose money by buying in "pump and dump" systems. "data-reactid =" 27 "> It is only natural that many investors, especially those who are new to the game, prefer to buy stocks in" sexy "stocks with a good history, even if these companies lose money in their study entitled Who falls victim to the Wall Street wolf? " Leuz et. al. found that it is "quite common" for investors to lose money by buying "pump and dump" systems.

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "In contrast, I prefer to spend time for companies how Meritage Homes (NYSE: MTH) that not only has income but also profits. While profit isn't necessarily a social good, it's easy to admire a company that can consistently produce it. In comparison, loss-making companies behave like a sponge for capital – but unlike such a sponge, they don't always produce something when squeezed together. "Data-reactid =" 28 "> In contrast, I prefer to spend time with companies like Meritage Homes (NYSE: MTH) that not only has revenue but also profits. While profit isn't necessarily a social good, it's easy to admire a company that can consistently produce it. In comparison, loss-making companies behave like a sponge for capital – but unlike such a sponge, they don't always produce something when squeezed together.

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = " Check out our latest analysis for Meritage Homes "data-reactid =" 29 "> Check out our latest analysis for Meritage Homes

How quickly does Meritage Homes increase earnings per share?

As one of my mentors once told me, the share price follows earnings per share (EPS). Therefore, there are many investors who like to buy shares in companies whose earnings per share are growing. We can see that Meritage Homes has increased its EPS by 15% a year over the past three years. This growth rate is pretty good, provided the company can keep up.

I want to take a look at earnings before interest and (EBIT) tax margins, as well as sales growth, to get another picture of the quality of company growth. While Meritage Homes' EBIT margins remained unchanged last year, sales grew solidly by 2.1% to $ 3.5 billion. It is progress.

The graphic below shows how the company's income statement has evolved over time. Click on the table to see the exact numbers.

NYSE: MTH Income Statement, January 3, 2020

<p class = "Canvas-Atom Canvas-Text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Of course it is important to find stocks that have their best Days in the future, not in the past. You could base your opinion on past performance, of course, but you may want to Check out this interactive chart of EPS forecasts from professional analysts for Meritage HomesEmagazine.credit-suisse.com/app/art…1007 & lang = DE Of course, stocks have to be found that have their best days in the future, not in the past. You could of course base your opinion on past performance, but you may also want to check out this interactive chart with EPS forecasts from professional analysts for Meritage Homes.

Do Meritage Homes insiders agree with all shareholders?

I like it when company leaders have a bit of a skin, so to speak, because it makes the incentives between the managers and their real owners better match. So it's good to see that Meritage Homes insiders have invested a significant portion of the capital in the stock. With shares totaling $ 71 million, insiders can count on the company's success. That is certainly enough to make me believe that management will be very focused on long-term growth.

Has Meritage Homes earned a place on your watch list?

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "As already mentioned, Meritage Homes is growing steadily. That is it’s what I like to see. If that’s not enough, there’s also a significant amount of insider ownership. This combination appeals to me. So yes, I think the stock is worth holding just because Meritage Homes is growing , of course that doesn’t mean it’s undervalued. If you’re wondering about the rating, check it out this measure of value for moneycompared to its industry. "data-reactid =" 50 "> As I mentioned earlier, Meritage Homes is a growing business, which I like to see. If that alone is not enough, there is something quite remarkable. This combination appeals to me, for example: yes, me think it's worth keeping an eye on the stock, just because Meritage Homes is growing doesn't mean it is undervalued, so take a look at this measure of value for money versus its industry.

<p class = "canvas-atom canvas-text MB (1.0em) MB (0) – SM MB (0.8em) – SM" type = "text" content = "You can invest in any company you want. But If you'd rather focus on stocks that showed insider buying, go here a list of companies that have made insider purchases in the past three months."data-reactid =" 51 "> You can invest in any company you want, but if you'd prefer to focus on stocks where insider buying has been demonstrated, here is a list of companies that have been insiders in the past three months Have made purchases.

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "Please note that the insider transactions dealt with in this article relate to reportable transactions in the respective jurisdiction"data-reactid =" 52 ">Please note that the insider transactions dealt with in this article relate to reportable transactions in the respective jurisdiction

<p class = "canvas-atom canvas-text Mb (1,0em) Mb (0) – sm Mt (0,8em) – sm" type = "text" content = "If you discover an error that justifies a correction, please contact the editorial team at editorial-team@simplywallst.com, This article from Simply Wall St is general in nature. It is not a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Simply Wall St has no position in the stocks mentioned.

We strive to provide you with long-term, focused research analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or quality material. Thank you for reading."data-reactid =" 57 ">If you discover an error that justifies a correction, please contact the editorial team at editorial-team@simplywallst.com. This article from Simply Wall St is general in nature. It is not a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Simply Wall St has no position in the stocks mentioned.

We strive to provide you with long-term, focused research analysis based on fundamental data. Note that our analysis may not take into account the latest price-sensitive company announcements or quality material. Thank you for reading.