We Ran A Stock Scan For Earnings Growth And Ultra Wiring Connectivity System (NSE:UWCSL) Passed With Ease

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. 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. 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 Ultra Wiring Connectivity System (NSE:UWCSL), which has not only revenues, but also profits. While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.

See our latest analysis for Ultra Wiring Connectivity System

Ultra Wiring Connectivity System's Earnings Per Share Are Growing

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. That makes EPS growth an attractive quality for any company. Shareholders will be happy to know that Ultra Wiring Connectivity System's EPS has grown 36% each year, compound, over three years. If growth like this continues on into the future, then shareholders will have plenty to smile about.

Careful consideration of revenue growth and earnings before interest and taxation (EBIT) margins can help inform a view on the sustainability of the recent profit growth. EBIT margins for Ultra Wiring Connectivity System remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 50% to ₹443m. That's a real positive.

In the chart below, you can see how the company has grown earnings and revenue, over time. To see the actual numbers, click on the chart.

Since Ultra Wiring Connectivity System is no giant, with a market capitalisation of ₹471m, you should definitely check its cash and debt before getting too excited about its prospects.

Are Ultra Wiring Connectivity System Insiders Aligned With All Shareholders?

Investors are always searching for a vote of confidence in the companies they hold and insider buying is one of the key indicators for optimism on the market. 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.

The good news for Ultra Wiring Connectivity System shareholders is that no insiders reported selling shares in the last year. With that in mind, it's heartening that Sanjay Mathur, the Chairman & MD of the company, paid ₹2.2m for shares at around ₹93.59 each. Purchases like this can help the investors understand the views of the management team; in which case they see some potential in Ultra Wiring Connectivity System.

These recent buys aren't the only encouraging sign for shareholders, as a look at the shareholder registry for Ultra Wiring Connectivity System will reveal that insiders own a significant piece of the pie. Indeed, with a collective holding of 51%, company insiders are in control and have plenty of capital behind the venture. This should be seen as a good thing, as it means insiders have a personal interest in delivering the best outcomes for shareholders. Although, with Ultra Wiring Connectivity System being valued at ₹471m, this is a small company we're talking about. That means insiders only have ₹242m worth of shares, despite the large proportional holding. This isn't an overly large holding but it should still keep the insiders motivated to deliver the best outcomes for shareholders.

Is Ultra Wiring Connectivity System Worth Keeping An Eye On?

For growth investors, Ultra Wiring Connectivity System's raw rate of earnings growth is a beacon in the night. Moreover, the management and board of the company hold a significant stake in the company, with one party adding to this total. These things considered, this is one stock worth watching. Before you take the next step you should know about the 2 warning signs for Ultra Wiring Connectivity System that we have uncovered.

Keen growth investors love to see insider buying. Thankfully, Ultra Wiring Connectivity System isn't the only one. You can see a a free list of them here.

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.