I Ran A Stock Scan For Earnings Growth And TechnoPlus Ventures (TLV:TNPV) Passed With Ease

Like a puppy chasing its tail, some new investors often chase 'the next big thing', even if that means buying 'story stocks' without revenue, let alone profit. But the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses.

So if you're like me, you might be more interested in profitable, growing companies, like TechnoPlus Ventures (TLV:TNPV). Now, I'm not saying that the stock is necessarily undervalued today; but I can't shake an appreciation for the profitability of the business itself. While a well funded company may sustain losses for years, unless its owners have an endless appetite for subsidizing the customer, it will need to generate a profit eventually, or else breathe its last breath.

View our latest analysis for TechnoPlus Ventures

How Fast Is TechnoPlus Ventures Growing Its Earnings Per Share?

Over the last three years, TechnoPlus Ventures has grown earnings per share (EPS) like young bamboo after rain; fast, and from a low base. So I don't think the percent growth rate is particularly meaningful. Thus, it makes sense to focus on more recent growth rates, instead. Like the last firework on New Year's Eve accelerating into the sky, TechnoPlus Ventures's EPS shot from US$0.012 to US$0.033, over the last year. Year on year growth of 168% is certainly a sight to behold. The best case scenario? That the business has hit a true inflection point.

I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. Not all of TechnoPlus Ventures's revenue this year is revenue from operations, so keep in mind the revenue and margin numbers I've used might not be the best representation of the underlying business. TechnoPlus Ventures shareholders can take confidence from the fact that EBIT margins are up from 40% to 63%, and revenue is growing. Ticking those two boxes is a good sign of growth, in my book.

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.

Since TechnoPlus Ventures is no giant, with a market capitalization of ₪28m, so you should definitely check its cash and debt before getting too excited about its prospects.

Are TechnoPlus Ventures Insiders Aligned With All Shareholders?

I always like to check up on CEO compensation, because I think that reasonable pay levels, around or below the median, can be a sign that shareholder interests are well considered. For companies with market capitalizations under ₪646m, like TechnoPlus Ventures, the median CEO pay is around ₪1.4m.

The CEO of TechnoPlus Ventures only received ₪252k in total compensation for the year ending . That looks like modest pay to me, and may hint at a certain respect for the interests of shareholders. While the level of CEO compensation isn't a huge factor in my view of the company, modest remuneration is a positive, because it suggests that the board keeps shareholder interests in mind. It can also be a sign of a culture of integrity, in a broader sense.

Is TechnoPlus Ventures Worth Keeping An Eye On?

TechnoPlus Ventures's earnings have taken off like any random crypto-currency did, back in 2017. With rocketing profits, its seems likely the business has a rosy future; and it may have hit an inflection point. Meanwhile, the very reasonable CEO pay reassures me a little, since it points to an absence profligacy. While I couldn't be sure without a deeper dive, it does seem that TechnoPlus Ventures has the hallmarks of a quality business; and that would make it well worth watching. We should say that we've discovered 3 warning signs for TechnoPlus Ventures (1 can't be ignored!) that you should be aware of before investing here.

You can invest in 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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