With EPS Growth And More, ICICI Lombard General Insurance (NSE:ICICIGI) Is Interesting

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. But as Warren Buffett has mused, 'If you've been playing poker for half an hour and you still don't know who the patsy is, you're the patsy.' When they buy such story stocks, investors are all too often the patsy.

So if you're like me, you might be more interested in profitable, growing companies, like ICICI Lombard General Insurance (NSE:ICICIGI). While profit is not necessarily a social good, it's easy to admire a business that can consistently produce it. Conversely, a loss-making company is yet to prove itself with profit, and eventually the sweet milk of external capital may run sour.

Check out our latest analysis for ICICI Lombard General Insurance

How Fast Is ICICI Lombard General Insurance Growing?

If a company can keep growing earnings per share (EPS) long enough, its share price will eventually follow. It's no surprise, then, that I like to invest in companies with EPS growth. As a tree reaches steadily for the sky, ICICI Lombard General Insurance's EPS has grown 19% each year, compound, over three years. If the company can sustain that sort of growth, we'd expect shareholders to come away winners.

I like to take a look at earnings before interest and (EBIT) tax margins, as well as revenue growth, to get another take on the quality of the company's growth. I note that ICICI Lombard General Insurance's revenue from operations was lower than its revenue in the last twelve months, so that could distort my analysis of its margins. ICICI Lombard General Insurance maintained stable EBIT margins over the last year, all while growing revenue 7.0% to ₹120b. That's progress.

The chart below shows how the company's bottom and top lines have progressed over time. To see the actual numbers, click on the chart.

Fortunately, we've got access to analyst forecasts of ICICI Lombard General Insurance's future profits. You can do your own forecasts without looking, or you can take a peek at what the professionals are predicting.

Are ICICI Lombard General Insurance Insiders Aligned With All Shareholders?

We would not expect to see insiders owning a large percentage of a ₹637b company like ICICI Lombard General Insurance. But we are reassured by the fact they have invested in the company. Indeed, they have a glittering mountain of wealth invested in it, currently valued at ₹7.7b. This suggests to me that leadership will be very mindful of shareholders' interests when making decisions!

Should You Add ICICI Lombard General Insurance To Your Watchlist?

For growth investors like me, ICICI Lombard General Insurance's raw rate of earnings growth is a beacon in the night. I think that EPS growth is something to boast of, and it doesn't surprise me that insiders are holding on to a considerable chunk of shares. So this is very likely the kind of business that I like to spend time researching, with a view to discerning its true value. Before you take the next step you should know about the 1 warning sign for ICICI Lombard General Insurance that we have uncovered.

Although ICICI Lombard General Insurance 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. 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.
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