Does SKM Egg Products Export (India) (NSE:SKMEGGPROD) Deserve A Spot On Your Watchlist?

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. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. Loss making companies can act like a sponge for capital - so investors should be cautious that they're not throwing good money after bad.

In contrast to all that, many investors prefer to focus on companies like SKM Egg Products Export (India) (NSE:SKMEGGPROD), which has not only revenues, but also profits. While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.

See our latest analysis for SKM Egg Products Export (India)

How Fast Is SKM Egg Products Export (India) Growing Its Earnings Per Share?

Over the last three years, SKM Egg Products Export (India) has grown earnings per share (EPS) at as impressive rate from a relatively low point, resulting in a three year percentage growth rate that isn't particularly indicative of expected future performance. As a result, we'll zoom in on growth over the last year, instead. In impressive fashion, SKM Egg Products Export (India)'s EPS grew from ₹4.45 to ₹8.40, over the previous 12 months. It's a rarity to see 89% year-on-year growth like that. Shareholders will be hopeful that this is a sign of the company reaching an inflection point.

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. The music to the ears of SKM Egg Products Export (India) shareholders is that EBIT margins have grown from 4.7% to 7.4% in the last 12 months and revenues are on an upwards trend as well. Both of which are great metrics to check off for potential growth.

The chart below shows how the company's bottom and top lines have progressed over time. Click on the chart to see the exact numbers.

SKM Egg Products Export (India) isn't a huge company, given its market capitalisation of ₹4.3b. That makes it extra important to check on its balance sheet strength.

Are SKM Egg Products Export (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.

We haven't seen any insiders selling SKM Egg Products Export (India) shares, in the last year. So it's definitely nice that company insider Ram Sharath bought ₹3.0m worth of shares at an average price of around ₹98.90. It seems that at least one insider is prepared to show the market there is potential within SKM Egg Products Export (India).

And the insider buying isn't the only sign of alignment between shareholders and the board, since SKM Egg Products Export (India) insiders own more than a third of the company. To be exact, company insiders hold 53% of the company, so their decisions have a significant impact on their investments. This makes it apparent they will be incentivised to plan for the long term - a positive for shareholders with a sit and hold strategy. To give you an idea, the value of insiders' holdings in the business are valued at ₹2.3b at the current share price. That should be more than enough to keep them focussed on creating shareholder value!

Is SKM Egg Products Export (India) Worth Keeping An Eye On?

SKM Egg Products Export (India)'s earnings have taken off in quite an impressive fashion. To sweeten the deal, insiders have significant skin in the game with one even acquiring more. This quick rundown suggests that the business may be of good quality, and also at an inflection point, so maybe SKM Egg Products Export (India) deserves timely attention. We don't want to rain on the parade too much, but we did also find 2 warning signs for SKM Egg Products Export (India) (1 shouldn't be ignored!) that you need to be mindful of.

Keen growth investors love to see insider buying. Thankfully, SKM Egg Products Export (India) isn't the only one. You can see a a free list of them here.

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.