If EPS Growth Is Important To You, International Conveyors (NSE:INTLCONV) 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 the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.

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 International Conveyors (NSE:INTLCONV). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide International Conveyors with the means to add long-term value to shareholders.

View our latest analysis for International Conveyors

International Conveyors' Improving Profits

Over the last three years, International Conveyors has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. As a result, we'll zoom in on growth over the last year, instead. Impressively, International Conveyors' EPS catapulted from ₹3.51 to ₹10.13, over the last year. Year on year growth of 188% is certainly a sight to behold.

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. International Conveyors' EBIT margins have actually improved by 6.6 percentage points in the last year, to reach 17%, but, on the flip side, revenue was down 30%. While not disastrous, these figures could be better.

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.

International Conveyors isn't a huge company, given its market capitalisation of ₹4.9b. That makes it extra important to check on its balance sheet strength.

Are International Conveyors Insiders Aligned With All Shareholders?

It's a necessity that company leaders act in the best interest of shareholders and so insider investment always comes as a reassurance to the market. International Conveyors followers will find comfort in knowing that insiders have a significant amount of capital that aligns their best interests with the wider shareholder group. As a matter of fact, their holding is valued at ₹1.3b. That shows significant buy-in, and may indicate conviction in the business strategy. Those holdings account for over 27% of the company; visible skin in the game.

Is International Conveyors Worth Keeping An Eye On?

International Conveyors' earnings per share have been soaring, with growth rates sky high. This level of EPS growth does wonders for attracting investment, and the large insider investment in the company is just the cherry on top. The hope is, of course, that the strong growth marks a fundamental improvement in the business economics. So at the surface level, International Conveyors is worth putting on your watchlist; after all, shareholders do well when the market underestimates fast growing companies. Even so, be aware that International Conveyors is showing 4 warning signs in our investment analysis , you should know about...

Although International Conveyors certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with insider buying, then check out this handpicked selection of Indian companies that not only boast of strong growth but have also seen recent insider 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.