Here's Why We Think Uravi T & Wedge Lamps (NSE:URAVI) Might Deserve Your Attention Today

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. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

In contrast to all that, many investors prefer to focus on companies like Uravi T & Wedge Lamps (NSE:URAVI), which has not only revenues, but also profits. While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

See our latest analysis for Uravi T & Wedge Lamps

How Fast Is Uravi T & Wedge Lamps Growing Its Earnings Per Share?

Uravi T & Wedge Lamps 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. Thus, it makes sense to focus on more recent growth rates, instead. In impressive fashion, Uravi T & Wedge Lamps' EPS grew from ₹0.79 to ₹1.71, over the previous 12 months. Year on year growth of 116% is certainly a sight to behold.

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. Uravi T & Wedge Lamps maintained stable EBIT margins over the last year, all while growing revenue 24% to ₹420m. That's progress.

The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.

Since Uravi T & Wedge Lamps is no giant, with a market capitalisation of ₹7.1b, you should definitely check its cash and debt before getting too excited about its prospects.

Are Uravi T & Wedge Lamps Insiders Aligned With All Shareholders?

Theory would suggest that it's an encouraging sign to see high insider ownership of a company, since it ties company performance directly to the financial success of its management. So we're pleased to report that Uravi T & Wedge Lamps insiders own a meaningful share of the business. Indeed, with a collective holding of 51%, company insiders are in control and have plenty of capital behind the venture. Intuition will tell you this is a good sign because it suggests they will be incentivised to build value for shareholders over the long term. To give you an idea, the value of insiders' holdings in the business are valued at ₹3.6b at the current share price. That should be more than enough to keep them focussed on creating shareholder value!

Should You Add Uravi T & Wedge Lamps To Your Watchlist?

Uravi T & Wedge Lamps' earnings have taken off in quite an impressive fashion. This level of EPS growth does wonders for attracting investment, and the large insider investment in the company is just the cherry on top. At times fast EPS growth is a sign the business has reached an inflection point, so there's a potential opportunity to be had here. Based on the sum of its parts, we definitely think its worth watching Uravi T & Wedge Lamps very closely. It is worth noting though that we have found 5 warning signs for Uravi T & Wedge Lamps (3 don't sit too well with us!) that you need to take into consideration.

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 IN 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.