If EPS Growth Is Important To You, Asahi India Glass (NSE:ASAHIINDIA) Presents An Opportunity

Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. 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 Asahi India Glass (NSE:ASAHIINDIA). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Asahi India Glass with the means to add long-term value to shareholders.

Check out our latest analysis for Asahi India Glass

Asahi India Glass' Earnings Per Share Are Growing

Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Recognition must be given to the that Asahi India Glass has grown EPS by 37% per year, 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.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. Asahi India Glass shareholders can take confidence from the fact that EBIT margins are up from 17% to 20%, and revenue is growing. Both of which are great metrics to check off for potential growth.

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 Asahi India Glass Insiders Aligned With All Shareholders?

Insider interest in a company always sparks a bit of intrigue and many investors are on the lookout for companies where insiders are putting their money where their mouth is. That's because insider buying often indicates that those closest to the company have confidence that the share price will perform well. However, small purchases are not always indicative of conviction, and insiders don't always get it right.

Insiders both bought and sold Asahi India Glass shares in the last year, but the good news is they spent ₹2.8m more buying than they netted selling. So, on balance, the insider transactions are mildly encouraging. We also note that it was the company insider, Brij Labroo, who made the biggest single acquisition, paying ₹41m for shares at about ₹562 each.

Along with the insider buying, another encouraging sign for Asahi India Glass is that insiders, as a group, have a considerable shareholding. We note that their impressive stake in the company is worth ₹36b. Coming in at 29% of the business, that holding gives insiders a lot of influence, and plenty of reason to generate value for shareholders. Very encouraging.

Does Asahi India Glass Deserve A Spot On Your Watchlist?

Asahi India Glass' earnings per share growth have been climbing higher at an appreciable rate. What's more, insiders own a significant stake in the company and have been buying more shares. These factors seem to indicate the company's potential and that it has reached an inflection point. We'd suggest Asahi India Glass belongs near the top of your watchlist. What about risks? Every company has them, and we've spotted 2 warning signs for Asahi India Glass you should know about.

There are plenty of other companies that have insiders buying up shares. So if you like the sound of Asahi India Glass, you'll probably love this free list of growing companies that insiders are buying.

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.