Here's why I don't care about share price or EPS.
Delta Air Lines Director George N. Mattson Acquires 5,000 Shares (DAL) | Ticker Report
I can't afford $209,400 for 5000 shares @ $41.88/share.
Even with a return that beats the consensus $4.61 EPS (earnings per share) this year, say $5 EPS that's a return of $25,000. My profit sharing was more last year about $26,000ish and I didn't spend a dime.
Our profit sharing comes off the top as the earnings are booked each quarter, prior to the investor returns. This is why they want it back. This also creates a lower level of risk compared to the investor.
Further reducing the risk is an insiders willingness to purchase the stock. This requires public disclosure and legal requirements that have to be met.
And finally the best evidence our profit sharing is secure for the next 3 years is the $6 billion promise they made to investors through 2017. You can't make this kind of promise unless you have good visibility on earnings for the period. Their visibility is good but not great. The last shareholder return package was completed early meaning they underestimated and over delivered. That's the key to impressing analysts and driving stock price. It also gives them wiggle room just in case they are only good. They would still be able to deliver even if their cost estimates were off say $480m annually. If this is the baseline what's the upside?
Debunking "at risk" one insider purchase at a time. Look for more in the near future.