Marine Electricals (India) (NSE:MARINE) Ticks All The Boxes When It Comes To Earnings Growth

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 are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.

In contrast to all that, many investors prefer to focus on companies like Marine Electricals (India) (NSE:MARINE), which has not only revenues, but also profits. Now this is not to say that the company presents the best investment opportunity around, but profitability is a key component to success in business.

Check out our latest analysis for Marine Electricals (India)

How Quickly Is Marine Electricals (India) Increasing Earnings Per Share?

If a company can keep growing earnings per share (EPS) long enough, its share price should eventually follow. That means EPS growth is considered a real positive by most successful long-term investors. Impressively, Marine Electricals (India) has grown EPS by 26% per year, compound, in the last three years. If growth like this continues on into the future, then shareholders will have plenty to smile about.

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. EBIT margins for Marine Electricals (India) remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 5.4% to ₹3.9b. 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.

Since Marine Electricals (India) is no giant, with a market capitalisation of ₹4.9b, you should definitely check its cash and debt before getting too excited about its prospects.

Are Marine Electricals (India) Insiders Aligned With All Shareholders?

It's said that there's no smoke without fire. For investors, insider buying is often the smoke that indicates which stocks could set the market alight. This view is based on the possibility that stock purchases signal bullishness on behalf of the buyer. Of course, we can never be sure what insiders are thinking, we can only judge their actions.

It's nice to see that there have been no reports of any insiders selling shares in Marine Electricals (India) in the previous 12 months. Add in the fact that Vinay Uchil, the Executive Chairman of the company, paid ₹2.2m for shares at around ₹28.44 each. Purchases like this can help the investors understand the views of the management team; in which case they see some potential in Marine Electricals (India).

On top of the insider buying, it's good to see that Marine Electricals (India) insiders have a valuable investment in the business. Indeed, they hold ₹1.1b worth of its stock. This considerable investment should help drive long-term value in the business. As a percentage, this totals to 22% of the shares on issue for the business, an appreciable amount considering the market cap.

Should You Add Marine Electricals (India) To Your Watchlist?

You can't deny that Marine Electricals (India) has grown its earnings per share at a very impressive rate. That's attractive. 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. You still need to take note of risks, for example - Marine Electricals (India) has 1 warning sign we think you should be aware of.

The good news is that Marine Electricals (India) is not the only growth stock with insider buying. Here's a list of them... with insider buying in the last three months!

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.