If EPS Growth Is Important To You, Maan Aluminium (NSE:MAANALU) Presents An Opportunity

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 the reality is that when a company loses money each year, for long enough, its investors will usually take their share of those losses. Loss-making companies are always racing against time to reach financial sustainability, so investors in these companies may be taking on more risk than they should.

If this kind of company isn't your style, you like companies that generate revenue, and even earn profits, then you may well be interested in Maan Aluminium (NSE:MAANALU). 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 Maan Aluminium

Maan Aluminium's Improving Profits

Maan Aluminium has undergone a massive growth in earnings per share over the last three years. So much so that this three year growth rate wouldn't be a fair assessment of the company's future. As a result, we'll zoom in on growth over the last year, instead. Outstandingly, Maan Aluminium's EPS shot from ₹4.65 to ₹9.56, over the last year. It's not often a company can achieve year-on-year growth of 105%. The best case scenario? That the business has hit a true 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 good news is that Maan Aluminium is growing revenues, and EBIT margins improved by 2.6 percentage points to 8.0%, over the last year. Ticking those two boxes is a good sign of growth, in our book.

You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.

Since Maan Aluminium is no giant, with a market capitalisation of ₹3.8b, you should definitely check its cash and debt before getting too excited about its prospects.

Are Maan Aluminium 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 those who are interested in Maan Aluminium will be delighted to know that insiders have shown their belief, holding a large proportion of the company's shares. To be exact, company insiders hold 66% 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. In terms of absolute value, insiders have ₹2.5b invested in the business, at the current share price. So there's plenty there to keep them focused!

Does Maan Aluminium Deserve A Spot On Your Watchlist?

Maan Aluminium's earnings per share have been soaring, with growth rates sky high. 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. At times fast EPS growth is a sign the business has reached an inflection point, so there's a potential opportunity to be had here. So at the surface level, Maan Aluminium is worth putting on your watchlist; after all, shareholders do well when the market underestimates fast growing companies. Even so, be aware that Maan Aluminium is showing 5 warning signs in our investment analysis , and 1 of those makes us a bit uncomfortable...

The beauty of investing is that you can invest in almost any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies with insider buying in the last three months.

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.