I Ran A Stock Scan For Earnings Growth And Novolog (Pharm-Up 1966) (TLV:NVLG) Passed With Ease

It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks with a good story, even if those businesses lose money. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.

If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in Novolog (Pharm-Up 1966) (TLV:NVLG). Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. Loss-making companies are always racing against time to reach financial sustainability, but time is often a friend of the profitable company, especially if it is growing.

Check out our latest analysis for Novolog (Pharm-Up 1966)

Novolog (Pharm-Up 1966)'s Earnings Per Share Are Growing.

If a company can keep growing earnings per share (EPS) long enough, its share price will eventually follow. That means EPS growth is considered a real positive by most successful long-term investors. Over the last three years, Novolog (Pharm-Up 1966) has grown EPS by 9.3% per year. That growth rate is fairly good, assuming the company can keep it up.

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. While we note Novolog (Pharm-Up 1966)'s EBIT margins were flat over the last year, revenue grew by a solid 13% to ₪1.1b. That's a real positive.

You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.

While profitability drives the upside, prudent investors always check the balance sheet, too.

Are Novolog (Pharm-Up 1966) Insiders Aligned With All Shareholders?

I like company leaders to have some skin in the game, so to speak, because it increases alignment of incentives between the people running the business, and its true owners. As a result, I'm encouraged by the fact that insiders own Novolog (Pharm-Up 1966) shares worth a considerable sum. With a whopping ₪245m worth of shares as a group, insiders have plenty riding on the company's success. At 16% of the company, the co-investment by insiders gives me confidence that management will make long-term focussed decisions.

Does Novolog (Pharm-Up 1966) Deserve A Spot On Your Watchlist?

One important encouraging feature of Novolog (Pharm-Up 1966) is that it is growing profits. Just as polish makes silverware pop, the high level of insider ownership enhances my enthusiasm for this growth. That combination appeals to me, for one. So yes, I do think the stock is worth keeping an eye on. However, before you get too excited we've discovered 2 warning signs for Novolog (Pharm-Up 1966) (1 is potentially serious!) that you should be aware of.

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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