Here's Why We Think Thomas Cook (India) (NSE:THOMASCOOK) Might Deserve Your Attention Today

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 as Peter Lynch said in One Up On Wall Street, 'Long shots almost never pay off.' Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

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

Check out our latest analysis for Thomas Cook (India)

How Fast Is Thomas Cook (India) Growing Its Earnings Per Share?

Strong earnings per share (EPS) results are an indicator of a company achieving solid profits, which investors look upon favourably and so the share price tends to reflect great EPS performance. So a growing EPS generally brings attention to a company in the eyes of prospective investors. It is awe-striking that Thomas Cook (India)'s EPS went from ₹1.69 to ₹5.62 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.

Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. EBIT margins for Thomas Cook (India) remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 26% to ₹75b. That's progress.

You can take a look at the company's revenue and earnings growth trend, in the chart below. To see the actual numbers, click on the chart.

In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of Thomas Cook (India)'s forecast profits?

Are Thomas Cook (India) 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. Shareholders will be pleased by the fact that insiders own Thomas Cook (India) shares worth a considerable sum. Indeed, they hold ₹2.8b worth of its stock. That's a lot of money, and no small incentive to work hard. Even though that's only about 3.2% of the company, it's enough money to indicate alignment between the leaders of the business and ordinary shareholders.

Should You Add Thomas Cook (India) To Your Watchlist?

Thomas Cook (India)'s earnings per share growth have been climbing higher at an appreciable rate. That sort of growth is nothing short of eye-catching, and the large investment held by insiders should certainly brighten the view of the company. The hope is, of course, that the strong growth marks a fundamental improvement in the business economics. So based on this quick analysis, we do think it's worth considering Thomas Cook (India) for a spot on your watchlist. Now, you could try to make up your mind on Thomas Cook (India) by focusing on just these factors, or you could also consider how its price-to-earnings ratio compares to other companies in its industry.

Although Thomas Cook (India) 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.