With EPS Growth And More, Ultra Wiring Connectivity System (NSE:UWCSL) Makes An Interesting Case

The excitement of investing in a company that can reverse its fortunes is a big draw for some speculators, so even companies that have no revenue, no profit, and a record of falling short, can manage to find investors. Sometimes these stories can cloud the minds of investors, leading them to invest with their emotions rather than on the merit of good company fundamentals. A loss-making company is yet to prove itself with profit, and eventually the inflow of external capital may dry up.

Despite being in the age of tech-stock blue-sky investing, many investors still adopt a more traditional strategy; buying shares in profitable companies like Ultra Wiring Connectivity System (NSE:UWCSL). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide Ultra Wiring Connectivity System with the means to add long-term value to shareholders.

View our latest analysis for Ultra Wiring Connectivity System

How Fast Is Ultra Wiring Connectivity System Growing?

The market is a voting machine in the short term, but a weighing machine in the long term, so you'd expect share price to follow earnings per share (EPS) outcomes eventually. That makes EPS growth an attractive quality for any company. Recognition must be given to the that Ultra Wiring Connectivity System has grown EPS by 52% per year, over the last three years. That sort of growth rarely ever lasts long, but it is well worth paying attention to when it happens.

It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. Ultra Wiring Connectivity System shareholders can take confidence from the fact that EBIT margins are up from 7.3% to 12%, and revenue is growing. That's great to see, on both counts.

In the chart below, you can see how the company has grown earnings and revenue, over time. Click on the chart to see the exact numbers.

Since Ultra Wiring Connectivity System is no giant, with a market capitalisation of ₹528m, 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?

Many consider high insider ownership to be a strong sign of alignment between the leaders of a company and the ordinary shareholders. So as you can imagine, the fact that Ultra Wiring Connectivity System insiders own a significant number of shares certainly is appealing. In fact, they own 78% of the company, so they will share in the same delights and challenges experienced by the ordinary shareholders. This makes it apparent they will be incentivised to plan for the long term - a positive for shareholders with a sit and hold strategy. Although, with Ultra Wiring Connectivity System being valued at ₹528m, this is a small company we're talking about. So this large proportion of shares owned by insiders only amounts to ₹411m. That might not be a huge sum but it should be enough to keep insiders motivated!

Does Ultra Wiring Connectivity System Deserve A Spot On Your Watchlist?

Ultra Wiring Connectivity System's earnings per share growth have been climbing higher at an appreciable rate. That EPS growth certainly is attention grabbing, and the large insider ownership only serves to further stoke our interest. 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. So based on this quick analysis, we do think it's worth considering Ultra Wiring Connectivity System for a spot on your watchlist. Still, you should learn about the 2 warning signs we've spotted with Ultra Wiring Connectivity System.

Although Ultra Wiring Connectivity System certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with more skin in the game, then check out this handpicked selection of Indian companies that not only boast of strong growth but have strong insider backing.

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.