If EPS Growth Is Important To You, Anhui Transport Consulting & Design InstituteLtd (SHSE:603357) Presents An Opportunity

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and profit. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. 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 Anhui Transport Consulting & Design InstituteLtd (SHSE:603357). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Anhui Transport Consulting & Design InstituteLtd with the means to add long-term value to shareholders.

See our latest analysis for Anhui Transport Consulting & Design InstituteLtd

Anhui Transport Consulting & Design InstituteLtd's Earnings Per Share Are Growing

If you believe that markets are even vaguely efficient, then over the long term you'd expect a company's share price to follow its earnings per share (EPS) outcomes. Therefore, there are plenty of investors who like to buy shares in companies that are growing EPS. Anhui Transport Consulting & Design InstituteLtd managed to grow EPS by 15% per year, over three years. That's a pretty good rate, if the company can sustain it.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. Anhui Transport Consulting & Design InstituteLtd maintained stable EBIT margins over the last year, all while growing revenue 29% to CN¥3.1b. That's progress.

You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.

Of course the knack is 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 also want to check this interactive graph of professional analyst EPS forecasts for Anhui Transport Consulting & Design InstituteLtd.

Are Anhui Transport Consulting & Design InstituteLtd Insiders Aligned With All Shareholders?

It should give investors a sense of security owning shares in a company if insiders also own shares, creating a close alignment their interests. So it is good to see that Anhui Transport Consulting & Design InstituteLtd insiders have a significant amount of capital invested in the stock. Indeed, they hold CN¥221m worth of its stock. This considerable investment should help drive long-term value in the business. Even though that's only about 4.2% of the company, it's enough money to indicate alignment between the leaders of the business and ordinary shareholders.

Does Anhui Transport Consulting & Design InstituteLtd Deserve A Spot On Your Watchlist?

One important encouraging feature of Anhui Transport Consulting & Design InstituteLtd is that it is growing profits. For those who are looking for a little more than this, the high level of insider ownership enhances our enthusiasm for this growth. The combination definitely favoured by investors so consider keeping the company on a watchlist. However, before you get too excited we've discovered 3 warning signs for Anhui Transport Consulting & Design InstituteLtd (1 makes us a bit uncomfortable!) that you should be aware of.

Although Anhui Transport Consulting & Design InstituteLtd certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with insider buying, then check out this handpicked selection of Chinese companies that not only boast of strong growth but have also seen recent insider buying..

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.