With EPS Growth And More, Zhongman Petroleum and Natural Gas GroupLtd (SHSE:603619) Makes An Interesting Case

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. But as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' 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 Zhongman Petroleum and Natural Gas GroupLtd (SHSE:603619). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Zhongman Petroleum and Natural Gas GroupLtd with the means to add long-term value to shareholders.

Check out our latest analysis for Zhongman Petroleum and Natural Gas GroupLtd

How Fast Is Zhongman Petroleum and Natural Gas GroupLtd Growing Its Earnings Per Share?

Zhongman Petroleum and Natural Gas GroupLtd 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. Zhongman Petroleum and Natural Gas GroupLtd's EPS has risen over the last 12 months, growing from CN¥1.57 to CN¥1.94. There's little doubt shareholders would be happy with that 23% gain.

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. EBIT margins for Zhongman Petroleum and Natural Gas GroupLtd remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 3.9% to CN¥3.6b. That's progress.

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.

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 Zhongman Petroleum and Natural Gas GroupLtd?

Are Zhongman Petroleum and Natural Gas GroupLtd 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 Zhongman Petroleum and Natural Gas GroupLtd insiders have a significant amount of capital invested in the stock. Notably, they have an enviable stake in the company, worth CN¥1.4b. That equates to 15% of the company, making insiders powerful and aligned with other shareholders. Very encouraging.

Is Zhongman Petroleum and Natural Gas GroupLtd Worth Keeping An Eye On?

One important encouraging feature of Zhongman Petroleum and Natural Gas GroupLtd 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. That combination is very appealing. So yes, we do think the stock is worth keeping an eye on. You should always think about risks though. Case in point, we've spotted 2 warning signs for Zhongman Petroleum and Natural Gas GroupLtd you should be aware of.

While opting for stocks without growing earnings and absent insider buying can yield results, for investors valuing these key metrics, here is a carefully selected list of companies in CN with promising growth potential and insider confidence.

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.