Here's Why People's Insurance Company (Group) of China (HKG:1339) Has Caught The Eye Of Investors

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 People's Insurance Company (Group) of China (HKG:1339). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide People's Insurance Company (Group) of China with the means to add long-term value to shareholders.

View our latest analysis for People's Insurance Company (Group) of China

How Quickly Is People's Insurance Company (Group) of China Increasing Earnings Per Share?

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. People's Insurance Company (Group) of China managed to grow EPS by 11% per year, over three years. That's a pretty good rate, if the company can sustain it.

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. Our analysis has highlighted that People's Insurance Company (Group) of China's revenue from operations did not account for all of their revenue last year, so our analysis of its margins might not accurately reflect the underlying business. EBIT margins for People's Insurance Company (Group) of China remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 20% to CN¥633b. 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.

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 People's Insurance Company (Group) of China's future profits.

Are People's Insurance Company (Group) of China Insiders Aligned With All Shareholders?

Owing to the size of People's Insurance Company (Group) of China, we wouldn't expect insiders to hold a significant proportion of the company. But we do take comfort from the fact that they are investors in the company. To be specific, they have CN¥326m worth of shares. That's a lot of money, and no small incentive to work hard. Despite being just 0.1% of the company, the value of that investment is enough to show insiders have plenty riding on the venture.

Is People's Insurance Company (Group) of China Worth Keeping An Eye On?

As previously touched on, People's Insurance Company (Group) of China is a growing business, which is encouraging. To add an extra spark to the fire, significant insider ownership in the company is another highlight. That combination is very appealing. So yes, we do think the stock is worth keeping an eye on. We don't want to rain on the parade too much, but we did also find 1 warning sign for People's Insurance Company (Group) of China that you need to be mindful of.

Although People's Insurance Company (Group) of China certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see insider buying, then this free list of growing companies that insiders are buying, could be exactly what you're looking for.

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.