Here's Why We Think JEMTEC (CVE:JTC) Might Deserve Your Attention Today

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. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

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 JEMTEC (CVE:JTC). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide JEMTEC with the means to add long-term value to shareholders.

Check out our latest analysis for JEMTEC

How Fast Is JEMTEC Growing Its Earnings Per Share?

Even when EPS earnings per share (EPS) growth is unexceptional, company value can be created if this rate is sustained each year. So it's no surprise that some investors are more inclined to invest in profitable businesses. JEMTEC's EPS skyrocketed from CA$0.19 to CA$0.24, in just one year; a result that's bound to bring a smile to shareholders. That's a impressive gain of 28%.

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. While we note JEMTEC achieved similar EBIT margins to last year, revenue grew by a solid 18% to CA$2.9m. That's progress.

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.

JEMTEC isn't a huge company, given its market capitalisation of CA$3.9m. That makes it extra important to check on its balance sheet strength.

Are JEMTEC Insiders Aligned With All Shareholders?

Theory would suggest that it's an encouraging sign to see high insider ownership of a company, since it ties company performance directly to the financial success of its management. So those who are interested in JEMTEC will be delighted to know that insiders have shown their belief, holding a large proportion of the company's shares. Owning 47% of the company, insiders have plenty riding on the performance of the the share price. Those who are comforted by solid insider ownership like this should be happy, as it implies that those running the business are genuinely motivated to create shareholder value. Although, with JEMTEC being valued at CA$3.9m, this is a small company we're talking about. So this large proportion of shares owned by insiders only amounts to CA$1.9m. That might not be a huge sum but it should be enough to keep insiders motivated!

Does JEMTEC Deserve A Spot On Your Watchlist?

If you believe that share price follows earnings per share you should definitely be delving further into JEMTEC's strong EPS growth. This EPS growth rate is something the company should be proud of, and so it's no surprise that insiders are holding on to a considerable chunk of shares. On the balance of its merits, solid EPS growth and company insiders who are aligned with the shareholders would indicate a business that is worthy of further research. Even so, be aware that JEMTEC is showing 5 warning signs in our investment analysis , and 3 of those are significant...

The beauty of investing is that you can invest in almost any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies 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.