Is Now The Time To Put ShreeOswal Seeds and Chemicals (NSE:OSWALSEEDS) On Your Watchlist?

It's only natural that many investors, especially those who are new to the game, prefer to buy shares in 'sexy' stocks with a good story, even if those businesses lose money. Unfortunately, high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson.

If, on the other hand, you like companies that have revenue, and even earn profits, then you may well be interested in ShreeOswal Seeds and Chemicals (NSE:OSWALSEEDS). Now, I'm not saying that the stock is necessarily undervalued today; but I can't shake an appreciation for the profitability of the business itself. While a well funded company may sustain losses for years, unless its owners have an endless appetite for subsidizing the customer, it will need to generate a profit eventually, or else breathe its last breath.

View our latest analysis for ShreeOswal Seeds and Chemicals

How Fast Is ShreeOswal Seeds and Chemicals Growing Its Earnings Per Share?

Even with very modest growth rates, a company will usually do well if it improves earnings per share (EPS) year after year. So it's no surprise that some investors are more inclined to invest in profitable businesses. Like a wedge-tailed eagle on the wind, ShreeOswal Seeds and Chemicals's EPS soared from ₹2.82 to ₹3.62, in just one year. That's a commendable gain of 28%.

One way to double-check a company's growth is to look at how its revenue, and earnings before interest and tax (EBIT) margins are changing. While we note ShreeOswal Seeds and Chemicals's EBIT margins were flat over the last year, revenue grew by a solid 35% to ₹2.1b. That's a real positive.

In the chart below, you can see how the company has grown earnings, and revenue, over time. Click on the chart to see the exact numbers.

ShreeOswal Seeds and Chemicals isn't a huge company, given its market capitalization of ₹914m. That makes it extra important to check on its balance sheet strength.

Are ShreeOswal Seeds and Chemicals 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 we're pleased to report that ShreeOswal Seeds and Chemicals insiders own a meaningful share of the business. Indeed, with a collective holding of 70%, company insiders are in control and have plenty of capital behind the venture. This makes me think they will be incentivised to plan for the long term - something I like to see. Valued at only ₹914m ShreeOswal Seeds and Chemicals is really small for a listed company. So despite a large proportional holding, insiders only have ₹640m worth of stock. That's not a huge stake in absolute terms, but it should help keep insiders aligned with other shareholders.

Is ShreeOswal Seeds and Chemicals Worth Keeping An Eye On?

For growth investors like me, ShreeOswal Seeds and Chemicals's raw rate of earnings growth is a beacon in the night. Further, the high level of insider ownership impresses me, and suggests that I'm not the only one who appreciates the EPS growth. Fast growth and confident insiders should be enough to warrant further research. So the answer is that I do think this is a good stock to follow along with. However, before you get too excited we've discovered 3 warning signs for ShreeOswal Seeds and Chemicals (1 shouldn't be ignored!) that you should be aware of.

Although ShreeOswal Seeds and Chemicals certainly looks good to me, I would like it more if insiders were buying up shares. If you like to see insider buying, too, 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.