Here's Why We Think GQG Partners (ASX:GQG) Is Well Worth Watching

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. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

In contrast to all that, many investors prefer to focus on companies like GQG Partners (ASX:GQG), which has not only revenues, but also profits. While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.

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How Fast Is GQG Partners Growing Its Earnings Per Share?

GQG Partners has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. As a result, we'll zoom in on growth over the last year, instead. GQG Partners' EPS skyrocketed from US$0.095 to US$0.14, in just one year; a result that's bound to bring a smile to shareholders. That's a fantastic gain of 51%.

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. EBIT margins for GQG Partners remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 47% to US$760m. That's a real positive.

In the chart below, you can see how the company has grown earnings and revenue, over time. For finer detail, click on the image.

View our latest analysis for GQG Partners

You don't drive with your eyes on the rear-view mirror, so you might be more interested in this free report showing analyst forecasts for GQG Partners' future profits.

Are GQG Partners Insiders Aligned With All Shareholders?

Investors are always searching for a vote of confidence in the companies they hold and insider buying is one of the key indicators for optimism on the market. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. However, small purchases are not always indicative of conviction, and insiders don't always get it right.

It's pleasing to note that insiders spent US$8.5m buying GQG Partners shares, over the last year, without reporting any share sales whatsoever. Knowing this, GQG Partners 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 Founder Rajiv Jain who made the biggest single purchase, worth AU$534k, paying AU$1.94 per share.

On top of the insider buying, we can also see that GQG Partners insiders own a large chunk of the company. In fact, they own 74% of the company, so they will share in the same delights and challenges experienced by the ordinary shareholders. This should be seen as a good thing, as it means insiders have a personal interest in delivering the best outcomes for shareholders. And their holding is extremely valuable at the current share price, totalling US$4.9b. This is an incredible endorsement from them.

Does GQG Partners Deserve A Spot On Your Watchlist?

For growth investors, GQG Partners' raw rate of earnings growth is a beacon in the night. Not only that, but we can see that insiders both own a lot of, and are buying more shares in the company. So it's fair to say that this stock may well deserve a spot on your watchlist. It is worth noting though that we have found 1 warning sign for GQG Partners that you need to take into consideration.

Keen growth investors love to see insider activity. Thankfully, GQG Partners isn't the only one. You can see a a curated list of Australian 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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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.