If You Like EPS Growth Then Check Out Asian Granito India (NSE:ASIANTILES) Before It's Too Late

Some have more dollars than sense, they say, so even companies that have no revenue, no profit, and a record of falling short, can easily find investors. And in their study titled Who Falls Prey to the Wolf of Wall Street?' Leuz et. al. found that it is 'quite common' for investors to lose money by buying into 'pump and dump' schemes.

In the age of tech-stock blue-sky investing, my choice may seem old fashioned; I still prefer profitable companies like Asian Granito India (NSE:ASIANTILES). Even if the shares are fully valued today, most capitalists would recognize its profits as the demonstration of steady value generation. In comparison, loss making companies act like a sponge for capital - but unlike such a sponge they do not always produce something when squeezed.

See our latest analysis for Asian Granito India

How Fast Is Asian Granito India Growing Its Earnings Per Share?

Even with very modest growth rates, a company will usually do well if it improves earnings per share (EPS) year after year. So it's no surprise that some investors are more inclined to invest in profitable businesses. Like a wedge-tailed eagle on the wind, Asian Granito India's EPS soared from ₹14.02 to ₹18.57, in just one year. That's a commendable gain of 32%.

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 Asian Granito India's EBIT margins were flat over the last year, revenue grew by a solid 5.6% to ₹13b. That's a real positive.

You can take a look at the company's revenue and earnings growth trend, in the chart below. Click on the chart to see the exact numbers.

Asian Granito India isn't a huge company, given its market capitalization of ₹7.3b. That makes it extra important to check on its balance sheet strength.

Are Asian Granito India Insiders Aligned With All Shareholders?

Like the kids in the streets standing up for their beliefs, insider share purchases give me reason to believe in a brighter future. Because oftentimes, the purchase of stock is a sign that the buyer views it as undervalued. However, small purchases are not always indicative of conviction, and insiders don't always get it right.

While Asian Granito India insiders did net -₹502m selling stock over the last year, they invested ₹554m, a much higher figure. You could argue that level of buying implies genuine confidence in the business. It is also worth noting that it was Non-Independent Executive Chairman & MD Kamleshkumar Patel who made the biggest single purchase, worth ₹173m, paying ₹180 per share.

On top of the insider buying, we can also see that Asian Granito India insiders own a large chunk of the company. Actually, with 46% of the company to their names, insiders are profoundly invested in the business. I'm always comforted by solid insider ownership like this, as it implies that those running the business are genuinely motivated to create shareholder value. In terms of absolute value, insiders have ₹3.4b invested in the business, using the current share price. That's nothing to sneeze at!

Is Asian Granito India Worth Keeping An Eye On?

You can't deny that Asian Granito India has grown its earnings per share at a very impressive rate. That's attractive. On top of that, insiders own a significant stake in the company and have been buying more shares. So I do think this is one stock worth watching. You should always think about risks though. Case in point, we've spotted 2 warning signs for Asian Granito India you should be aware of.

As a growth investor I do like to see insider buying. But Asian Granito India 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. 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.
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