We Ran A Stock Scan For Earnings Growth And Suzhou SONAVOX ElectronicsLtd (SHSE:688533) Passed With Ease

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. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.

So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like Suzhou SONAVOX ElectronicsLtd (SHSE:688533). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Suzhou SONAVOX ElectronicsLtd with the means to add long-term value to shareholders.

AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early.

Suzhou SONAVOX ElectronicsLtd's Earnings Per Share Are Growing

The market is a voting machine in the short term, but a weighing machine in the long term, so you'd expect share price to follow earnings per share (EPS) outcomes eventually. That means EPS growth is considered a real positive by most successful long-term investors. To the delight of shareholders, Suzhou SONAVOX ElectronicsLtd has achieved impressive annual EPS growth of 52%, compound, over the last three years. Growth that fast may well be fleeting, but it should be more than enough to pique the interest of the wary stock pickers.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. The good news is that Suzhou SONAVOX ElectronicsLtd is growing revenues, and EBIT margins improved by 2.8 percentage points to 10%, over the last year. That's great to see, on both counts.

In the chart below, you can see how the company has grown earnings and revenue, over time. To see the actual numbers, click on the chart.

Check out our latest analysis for Suzhou SONAVOX ElectronicsLtd

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 Suzhou SONAVOX ElectronicsLtd?

Are Suzhou SONAVOX ElectronicsLtd Insiders Aligned With All Shareholders?

It's a necessity that company leaders act in the best interest of shareholders and so insider investment always comes as a reassurance to the market. So it is good to see that Suzhou SONAVOX ElectronicsLtd insiders have a significant amount of capital invested in the stock. To be specific, they have CN¥348m worth of shares. That shows significant buy-in, and may indicate conviction in the business strategy. That amounts to 6.5% of the company, demonstrating a degree of high-level alignment with shareholders.

Should You Add Suzhou SONAVOX ElectronicsLtd To Your Watchlist?

Suzhou SONAVOX ElectronicsLtd's earnings per share have been soaring, with growth rates sky high. That sort of growth is nothing short of eye-catching, and the large investment held by insiders should certainly brighten the view of the company. At times fast EPS growth is a sign the business has reached an inflection point, so there's a potential opportunity to be had here. Based on the sum of its parts, we definitely think its worth watching Suzhou SONAVOX ElectronicsLtd very closely. Still, you should learn about the 1 warning sign we've spotted with Suzhou SONAVOX ElectronicsLtd.

Although Suzhou SONAVOX ElectronicsLtd certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with more skin in the game, then check out this handpicked selection of Chinese companies that not only boast of strong growth but have strong insider backing.

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

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.