We Ran A Stock Scan For Earnings Growth And DB (International) Stock Brokers (NSE:DBSTOCKBRO) Passed With Ease

For beginners, it can seem like a good idea (and an exciting prospect) to buy a company that tells a good story to investors, even if it currently lacks a track record of revenue and 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. 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.

In contrast to all that, many investors prefer to focus on companies like DB (International) Stock Brokers (NSE:DBSTOCKBRO), which has not only revenues, but also profits. While profit isn't the sole metric that should be considered when investing, it's worth recognising businesses that can consistently produce it.

Check out our latest analysis for DB (International) Stock Brokers

DB (International) Stock Brokers' Improving Profits

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 for many budding investors, improving EPS is considered a good sign. It is awe-striking that DB (International) Stock Brokers' EPS went from ₹0.44 to ₹2.52 in just one year. When you see earnings grow that quickly, it often means good things ahead for the company. This could point to the business hitting a point of inflection.

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 DB (International) Stock Brokers remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 25% to ₹282m. That's progress.

The chart below shows how the company's bottom and top lines have progressed over time. For finer detail, click on the image.

Since DB (International) Stock Brokers is no giant, with a market capitalisation of ₹809m, you should definitely check its cash and debt before getting too excited about its prospects.

Are DB (International) Stock Brokers Insiders Aligned With All Shareholders?

Theory would suggest that it's an encouraging sign to see high insider ownership of a company, since it ties company performance directly to the financial success of its management. So those who are interested in DB (International) Stock Brokers will be delighted to know that insiders have shown their belief, holding a large proportion of the company's shares. Actually, with 36% of the company to their names, insiders are profoundly invested in the business. Shareholders and speculators should be reassured by this kind of alignment, as it suggests the business will be run for the benefit of shareholders. Valued at only ₹809m DB (International) Stock Brokers is really small for a listed company. So this large proportion of shares owned by insiders only amounts to ₹290m. That might not be a huge sum but it should be enough to keep insiders motivated!

Should You Add DB (International) Stock Brokers To Your Watchlist?

DB (International) Stock Brokers' earnings have taken off in quite an impressive fashion. 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 at the surface level, DB (International) Stock Brokers is worth putting on your watchlist; after all, shareholders do well when the market underestimates fast growing companies. Even so, be aware that DB (International) Stock Brokers is showing 2 warning signs in our investment analysis , you should know about...

Although DB (International) Stock Brokers 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.