Is Now The Time To Put SecUR Credentials (NSE:SECURCRED) On Your Watchlist?

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. 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. 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 SecUR Credentials (NSE:SECURCRED), 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.

View our latest analysis for SecUR Credentials

SecUR Credentials' Improving Profits

In business, profits are a key measure of success; and share prices tend to reflect earnings per share (EPS) performance. So a growing EPS generally brings attention to a company in the eyes of prospective investors. It's an outstanding feat for SecUR Credentials to have grown EPS from ₹0.14 to ₹2.29 in just one year. While it's difficult to sustain growth at that level, it bodes well for the company's outlook for the future. But the key is discerning whether something profound has changed, or if this is a just a one-off boost.

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. The good news is that SecUR Credentials is growing revenues, and EBIT margins improved by 10.3 percentage points to 24%, over the last year. Both of which are great metrics to check off for potential growth.

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 SecUR Credentials is no giant, with a market capitalisation of ₹973m, you should definitely check its cash and debt before getting too excited about its prospects.

Are SecUR Credentials 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 those who are interested in SecUR Credentials will be delighted to know that insiders have shown their belief, holding a large proportion of the company's shares. Actually, with 49% of the company to their names, insiders are profoundly invested in the business. This should be a welcoming sign for investors because it suggests that the people making the decisions are also impacted by their choices. Although, with SecUR Credentials being valued at ₹973m, this is a small company we're talking about. So this large proportion of shares owned by insiders only amounts to ₹475m. This isn't an overly large holding but it should still keep the insiders motivated to deliver the best outcomes for shareholders.

Does SecUR Credentials Deserve A Spot On Your Watchlist?

SecUR Credentials' 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. The hope is, of course, that the strong growth marks a fundamental improvement in the business economics. Based on the sum of its parts, we definitely think its worth watching SecUR Credentials very closely. Don't forget that there may still be risks. For instance, we've identified 3 warning signs for SecUR Credentials (2 are a bit unpleasant) you should be aware of.

Although SecUR Credentials certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see insider buying, then this free list of growing companies that insiders are buying, could be exactly what you're looking for.

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.