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. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

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 Hilton Worldwide Holdings (NYSE:HLT). While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

Check out our latest analysis for Hilton Worldwide Holdings

Hilton Worldwide Holdings' Improving Profits

Over the last three years, Hilton Worldwide Holdings has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. So it would be better to isolate the growth rate over the last year for our analysis. Hilton Worldwide Holdings' EPS shot up from US$4.35 to US$6.38; a result that's bound to keep shareholders happy. That's a fantastic gain of 46%.

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. It's noted that Hilton Worldwide Holdings' revenue from operations was lower than its revenue in the last twelve months, so that could distort our analysis of its margins. Hilton Worldwide Holdings maintained stable EBIT margins over the last year, all while growing revenue 7.7% to US$4.7b. That's a real positive.

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 Hilton Worldwide Holdings?

Are Hilton Worldwide Holdings Insiders Aligned With All Shareholders?

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. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. Of course, we can never be sure what insiders are thinking, we can only judge their actions.

The real kicker here is that Hilton Worldwide Holdings insiders spent a staggering US$1.4m on acquiring shares in just one year, without single share being sold in the meantime. Knowing this, Hilton Worldwide Holdings will have have all eyes on them in anticipation for the what could happen in the near future. It is also worth noting that it was Independent Director Judith McHale who made the biggest single purchase, worth US$1.0m, paying US$211 per share.

On top of the insider buying, it's good to see that Hilton Worldwide Holdings insiders have a valuable investment in the business. Notably, they have an enviable stake in the company, worth US$1.0b. This suggests that leadership will be very mindful of shareholders' interests when making decisions!

Does Hilton Worldwide Holdings Deserve A Spot On Your Watchlist?

If you believe that share price follows earnings per share you should definitely be delving further into Hilton Worldwide Holdings' strong EPS growth. On top of that, insiders own a significant stake in the company and have been buying more shares. These things considered, this is one stock worth watching. Even so, be aware that Hilton Worldwide Holdings is showing 2 warning signs in our investment analysis , and 1 of those is concerning...

The good news is that Hilton Worldwide Holdings is not the only stock with insider buying. Here's a list of small cap, undervalued companies in the US with insider buying in the last three months!

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

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This 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.